Beyond Borders: How European Startups Are Transforming U.S.
Between 2020 and 2024, a surge of European veterinary service startups sought expansion into the U.S. market. This week's Thavma Insights delivers a strategic overview of our research, uncovering key industry trends, market dynamics, and competitive forces shaping the U.S. expansion of European veterinary startups.
Industry Overview: Trends and Market Dynamics (2020–2024)
THAVMA INSIGHT: The "humanization" of pets and rising veterinary costs have fueled a booming U.S. pet healthcare market, providing opportunities for European startups.
Over the past few years, the U.S. pet healthcare industry has undergone a profound transformation, driven by shifts in consumer behavior, technological advancements, and increased investment. In 2024, pet care expenditures in the U.S. surpassed $150 billion, with veterinary services representing a significant share of this growing market. As pet owners continue to prioritize high-quality care, the demand for innovative, accessible, and cost-effective veterinary solutions has never been higher.
The COVID-19 pandemic acted as a catalyst for telemedicine in veterinary care, pushing clinics and pet owners to adopt remote consultation models. While initial adoption was driven by necessity, telehealth has since carved out a lasting role in the industry, particularly for triage, follow-up care, and chronic disease management. This shift aligns with the broader digitization of veterinary services, which has seen increased adoption of AI diagnostics, cloud-based practice management systems, and integrated telehealth platforms. These technologies are enhancing efficiency and improving patient outcomes, creating opportunities for European startups offering cutting-edge digital solutions.
Despite these advancements, pet insurance adoption in the U.S. remains under 5%, presenting a massive opportunity for European providers. Unlike in Europe, where pet insurance is more widely accepted, many American pet owners are still unfamiliar with or hesitant about coverage options. However, with rising veterinary costs and growing awareness, the pet insurance sector is expected to expand significantly, particularly as digital-first insurtech startups introduce more consumer-friendly policies.
At the same time, corporate consolidations and multinational investments are reshaping the competitive landscape. Large veterinary groups, insurers, and pet care giants are expanding their market share, making it essential for new entrants to navigate both collaboration and competition strategically. As major players strengthen their foothold, startups must find ways to differentiate, form key partnerships, and leverage innovative business models to gain traction in this evolving market.
The U.S. pet healthcare sector presents both immense opportunities and formidable challenges for European veterinary startups. Success requires more than just a great product, it demands a deep understanding of market dynamics, regulatory frameworks, and strategic positioning in a competitive and fast-moving industry.
How European Startups Are Carving Out Space in the U.S. Market
THAVMA INSIGHT: Success in the U.S. pet healthcare market is about entering strategically. European startups must go beyond simply offering innovative solutions; they must differentiate themselves, navigate complex regulations, and leverage strategic partnerships to drive adoption. Whether through insurer alliances, software integrations, or B2B collaborations, the companies that thrive are those that align with industry needs, integrate seamlessly into existing systems, and find a competitive edge that sets them apart from established players.
Expanding into the U.S. pet healthcare industry is no small feat, especially when established players already dominate key sectors. For European veterinary startups, success in this highly competitive market hinges on differentiation, strategic partnerships, and adaptability.
Telemedicine has seen fierce competition from North American incumbents like Vetster and AirVet, which quickly gained traction in the U.S. market during the pandemic-driven surge in virtual veterinary care. For European telehealth providers like FirstVet, simply offering remote consultations was not enough. Instead, they leveraged insurer partnerships to embed their services within existing pet insurance plans, ensuring a steady pipeline of users and a more seamless adoption process.
In pet insurance, European insurtech startups such as ManyPets have faced significant hurdles competing against well-established U.S. providers like Trupanion and Nationwide. Unlike in Europe, where pet insurance penetration is higher, the U.S. market is still developing, making brand recognition and trust-building critical for new entrants. To gain a foothold, European insurers must navigate complex state-by-state regulations, secure underwriting approvals, and invest heavily in marketing to educate pet owners on the benefits of coverage.
Meanwhile, software and AI-driven diagnostics have opened new doors for European startups looking to modernize veterinary practices. Companies like Barkibu and Vetstoria bring cutting-edge solutions, AI-powered diagnostics, smart scheduling tools, and practice management innovations. However, their success relies on seamless integration with entrenched U.S. veterinary software systems, many of which have deep-rooted customer relationships and proprietary ecosystems. Overcoming these barriers requires not only technical compatibility but also strong industry partnerships to encourage adoption.
For European startups in veterinary diagnostics, the most effective route into the U.S. market has been through strategic collaborations rather than direct competition. VolitionRx, for example, sidestepped the challenge of competing with industry giants like IDEXX and Antech by partnering with them instead. This approach enabled them to distribute their innovative diagnostic tests through existing U.S. lab networks, allowing faster market penetration without the burden of building their own distribution infrastructure.
As European veterinary startups continue to navigate their U.S. expansion, strategic positioning is essential. Whether through partnerships, regulatory expertise, or market differentiation, those that successfully align their offerings with the needs of the U.S. industry will be the ones to thrive. The key to success isn’t just entering the market, it’s finding the right way to compete within it.
How European Startups Can Overcome the Challenges of U.S. Market Expansion
THAVMA INSIGHT: Expanding into the U.S. pet healthcare market requires strategic execution, adaptability, and differentiation. Success depends on navigating regulations, building trust, and scaling effectively in a competitive landscape. Startups that embrace partnerships, localize strategies, and take a well-funded, phased approach will unlock the market’s vast potential to lead the future of pet healthcare.
Expanding into the world’s largest pet healthcare market is an ambitious move, one that comes with both incredible opportunity and significant obstacles. For European veterinary startups, breaking into the U.S. requires more than just a great product or service. It demands strategic navigation of regulations, market positioning, and operational scalability to ensure lasting success.
Here are the four biggest barriers standing between European startups and U.S. market success - and what it takes to overcome them.
1. Navigating Regulatory Complexity
One of the most formidable challenges for European startups is the patchwork of state-specific regulations governing the U.S. veterinary industry. Unlike Europe, where veterinary laws are often standardized, the U.S. requires businesses to comply with 50 different sets of state regulations, each with unique licensing requirements and restrictions.
Telemedicine is a prime example. Many states still enforce Veterinary-Client-Patient Relationship (VCPR) rules, which mandate an in-person exam before a veterinarian can diagnose or prescribe treatment remotely. This creates a major roadblock for European telehealth providers that are accustomed to more flexible regulations. The solution? Companies must develop state-by-state rollout strategies, prioritize partnerships with U.S.-licensed veterinarians, and stay proactive in regulatory discussions to adapt as the legal landscape evolves.
2. Establishing Market Familiarity and Trust
Even with regulatory approval, gaining the trust of U.S. veterinarians and pet owners is a separate challenge altogether. Unlike homegrown brands, foreign companies often face skepticism in an industry where relationships and reputation matter deeply.
U.S. veterinarians and pet owners prefer brands they recognize and have experience with making it difficult for newcomers to gain traction without strategic endorsements. The key to overcoming this? European startups must invest in building credibility through:
Partnerships with well-known U.S. veterinary groups or pet insurance providers
Collaborations with veterinary associations to gain professional trust
A strong local presence, including industry conference participation and on-the-ground leadership
A localized approach, including targeted marketing, customer testimonials, and early adopters advocating for the brand can make all the difference in bridging the trust gap.
3. Differentiating in a Saturated Market
The U.S. pet healthcare industry is not just large, it’s also highly competitive. Many sectors, from telemedicine to insurance to diagnostics, are already dominated by established players. Without a clear differentiator, startups risk being drowned out by U.S. incumbents with deeper market penetration and brand loyalty.
For European startups, the challenge isn’t just entering the market - it’s standing out. Those that succeed do so by:
Identifying gaps in existing solutions and offering a unique advantage (e.g., AI-powered diagnostics, seamless digital experiences, or innovative insurance models)
Developing strategic alliances with established companies rather than competing head-to-head
Focusing on underserved niches (e.g., specialty care, integrated wellness solutions, or subscription-based vet services)
The bottom line? Doing what already exists won’t be enough, true success comes from offering something different, better, or more efficient.
4. Scaling Operations for U.S. Growth
Success in Europe does not automatically translate into success in the U.S. The scale of the American market introduces logistical and operational hurdles that many startups underestimate.
The U.S. is geographically vast and diverse, meaning startups must localize their offerings, build regional customer support, and navigate different consumer behaviors across states. Additionally, operating across multiple time zones requires strong customer service infrastructure to ensure timely responses and seamless experiences for clinics and pet owners.
What does it take to scale successfully?
Investment in local talent: Hiring U.S.-based leadership and customer support teams to manage day-to-day operations
A well-funded expansion plan: Ensuring enough capital to sustain growth while adapting to unforeseen challenges
A phased rollout strategy: Testing entry in key pet-dense markets before scaling nationwide
Expanding into the U.S. pet healthcare market is not for the faint of heart—but it is possible. The European startups that succeed are those that navigate regulations smartly, build trust strategically, differentiate their offerings, and scale with intention.
For those willing to adapt, collaborate, and persist, the U.S. presents an unparalleled opportunity to innovate, disrupt, and redefine pet healthcare.
How Investment Trends Are Shaping the Future of Pet Tech
THAVMA INSIGHT: The pet tech investment boom has shifted from rapid expansion to sustainable growth. Startups must now balance innovation with profitability, operational efficiency, and strategic partnerships to secure funding and thrive in a more selective market. Success in 2024 and beyond will belong to those who demonstrate measurable impact and financial resilience.
In 2021, the pet tech industry experienced an unprecedented surge in investment, with over $1 billion raised globally. The pandemic-driven pet boom, combined with rapid advancements in telehealth, diagnostics, and insurance, created a gold rush for startups looking to revolutionize veterinary care. Investors were eager to back companies that promised to disrupt traditional pet healthcare, fueling aggressive expansion and innovation across the sector.
Among the biggest winners of this investment wave was ManyPets, which secured a staggering $350 million to support its U.S. expansion. The size of this funding round underscored a critical reality: breaking into the U.S. market isn’t just about having a great product, it’s capital-intensive and requires deep financial backing. From navigating regulatory approvals to scaling operations across a vast and complex market, startups needed substantial funding to establish themselves in a highly competitive space.
However, by 2023, the investment landscape had shifted. The days of rapid, unchecked growth gave way to a new focus: profitability and sustainability. As economic conditions tightened, investors began prioritizing startups with proven business models, clear paths to profitability, and strong unit economics. The message was clear, market expansion alone wasn’t enough; scalability had to be paired with financial discipline.
Despite this shift, corporate investors remain committed to pet tech innovation. Industry giants like Mars Petcare and Leap Venture Studio continue to back forward-thinking startups, but with a more selective and strategic approach. The emphasis now is on long-term value creation rather than short-term growth, pushing startups to refine their models, focus on efficiency, and demonstrate measurable impact in the veterinary space.
For entrepreneurs in pet healthcare, the opportunity remains as promising as ever, but the game has changed. Success in 2024 and beyond will belong to those who can balance innovation with operational excellence, attract strategic investment, and build businesses that are not just disruptive, but also financially resilient
Why Innovation Alone Isn’t Enough to Drive Consumer Adoption
THAVMA INSIGHT: While innovation is reshaping pet healthcare, true adoption depends on proving real value. Telehealth, AI diagnostics, and digital insurance are gaining traction, but widespread acceptance requires aligning with both pet owner expectations and veterinary workflows. The companies that succeed will be those that move beyond novelty. Integrating technology in ways that enhance care, improve efficiency, and earn trust from both consumers and clinicians.
The pandemic reshaped consumer behavior overnight, accelerating the adoption of telehealth across industries including veterinary care. For a brief moment, it seemed as if virtual vet visits would become a mainstay in pet healthcare, revolutionizing how pet owners accessed medical advice and treatment.
Yet, despite this initial surge in interest, only about 3% of veterinary visits in the U.S. currently utilize telehealth. The reality is that pet owners and veterinarians alike have been slow to fully embrace remote care, preferring in-person consultations for more comprehensive examinations. Rather than replacing traditional vet visits, telehealth is finding its niche as a complementary service, helping with triage, follow-ups, and preventative care, but not fully replacing hands-on veterinary attention.
Millennials and Gen Z are driving a surge in pet insurance adoption. As younger generations increasingly see pets as family members, they are seeking out financial protection against rising veterinary costs. Startups like ManyPets have seized this opportunity, offering digital-first, customizable insurance plans that appeal to tech-savvy pet owners who expect seamless, app-based experiences.
But while pet owners are embracing innovation, the veterinary community remains cautious. Adoption of new technologies is happening, but at a gradual pace, as clinics weigh the benefits of integrating telehealth, AI diagnostics, and digital insurance partnerships into their existing workflows. The key to unlocking widespread adoption lies in demonstrating real value, both in improving patient outcomes and in making veterinary practices more efficient.
The future of pet healthcare is digital, but innovation alone isn’t enough. The startups that succeed will be the ones that listen to both pet owners and veterinarians, refine their value propositions, and integrate technology in ways that truly enhance the care experience.
How European Startups Are Winning (and Learning) in the U.S. Market
THAVMA INSIGHT: Success in the U.S. pet healthcare market isn’t about simply entering - it’s about entering strategically. The startups that thrive are those that leverage partnerships, secure strong financial backing, and adapt to regulatory and competitive realities. While some companies successfully scale through direct consumer expansion, others find a foothold through B2B collaborations or strategic exits. The key to long-term success lies in choosing the right market entry approach, staying agile, and aligning with industry dynamics.
Breaking into the highly competitive U.S. pet healthcare industry is a bold move, one that requires capital, strategy, and adaptability. While some European startups have successfully carved out a space for themselves, others have faced regulatory roadblocks, intense competition, or the need to pivot their approach. The journey to U.S. expansion is filled with both hard-won victories and valuable lessons.
Some startups have not just entered the U.S. market - they’ve thrived. Companies like ManyPets (insurance), FirstVet (telehealth), and Barkibu (AI diagnostics) have successfully established a strong presence by securing major partnerships and attracting significant investment. ManyPets, for instance, expanded rapidly by offering a tech-driven, consumer-friendly insurance model, while FirstVet strategically aligned with U.S. insurers to embed telehealth within existing policies, ensuring built-in adoption. Barkibu leveraged AI-powered diagnostics, positioning itself as a game-changer in predictive pet health solutions. These companies exemplify the power of market adaptation, strategic alliances, and deep financial backing in achieving U.S. growth.
However, not all expansion stories have been seamless. Some European startups, like PawSquad, initially set their sights on the U.S. but later shifted focus elsewhere after struggling to gain traction. These challenges highlight the regulatory complexities, entrenched competition, and need for brand trust that can make or break a foreign entrant. Without a strong foothold or differentiated value proposition, even the most innovative startups can find themselves reassessing their strategy.
For others, the U.S. market wasn’t about direct competition, it was about strategic exits and partnerships. Some European firms chose B2B collaborations or acquisitions rather than taking on the high costs of consumer marketing. By aligning with established industry players, they secured a U.S. foothold without the burden of building a brand from scratch. This approach has proven to be a smart alternative for startups that bring valuable technology but lack the resources for large-scale market penetration.
The lesson? U.S. expansion is possible - but it’s not one-size-fits-all. The companies that succeed are those that adapt, invest, and find the right market entry strategy, whether through direct scaling, partnerships, or acquisitions. The key is not just entering the U.S. market, but navigating it with precision, persistence, and a clear strategic edge.
The Four Biggest Challenges European Startups Face in the U.S. Market
THAVMA INSIGHT: Expanding into the U.S. pet healthcare market requires navigating complex regulations, adapting to consumer expectations, ensuring financial sustainability, and standing out in a competitive landscape. Success isn’t just about entering the market, it’s about breaking through barriers with a clear strategy, strong positioning, and the agility to adapt.
Breaking into the U.S. pet healthcare market is a bold move that offers immense opportunities but also presents some of the most complex challenges for European startups. The scale, regulations, consumer expectations, and competitive landscape require companies to go beyond innovation and strategically navigate the realities of doing business in the U.S. Here are four key obstacles that have shaped the experiences of international entrants and the lessons they offer for future expansion.
1. Regulatory Complexity: Navigating a Fragmented Landscape
Unlike Europe, where veterinary regulations tend to be more standardized, the U.S. operates on a state-by-state basis, making compliance a significant hurdle for new entrants. Licensing, telehealth restrictions, and insurance regulations vary across all 50 states, requiring startups to invest heavily in legal expertise and develop phased market entry strategies. Telemedicine providers, for example, must carefully structure their services to comply with Veterinary-Client-Patient Relationship (VCPR) laws, which often mandate in-person exams before remote treatment is allowed. Startups that overlook these nuances risk costly delays and legal roadblocks before they can even begin operating.
2. Cultural Adaptation: Meeting U.S. Consumer Expectations
Breaking into a new market isn’t just about offering a great product - it’s about understanding the consumer. U.S. pet owners have different expectations than their European counterparts, particularly when it comes to service, convenience, and digital experience. Many expect 24/7 customer support, instant access to veterinary services, and a highly responsive, mobile-first experience. Companies that fail to invest in customer engagement, localized messaging, and on-demand services often struggle to gain traction. Success in the U.S. means adapting not just translating your offering to fit the needs and behaviors of American pet owners.
3. Financial Missteps: Underestimating the True Cost of Expansion
Expanding into the U.S. requires significant capital, and miscalculating operational costs has led to financial struggles for some startups. Higher labor costs, complex tax structures, and expensive customer acquisition can quickly drain resources if not carefully planned. Some companies enter with European pricing models that don’t align with the U.S. market, leading to unsustainable margins or consumer resistance. The startups that succeed are those that conduct deep market research, test pricing strategies, and secure strong financial backing to sustain their growth.
4. Competitive Blind Spots: The Risk of Being "Just Another Option"
The U.S. pet healthcare market is crowded and competitive, and many startups have learned the hard way that simply offering a similar service isn’t enough. Companies that enter without a clear, differentiated value proposition struggle to attract customers who are already loyal to existing solutions. Whether it’s telehealth, pet insurance, or diagnostics, the key to standing out is finding a unique advantage whether in technology, pricing, partnerships, or a niche focus. European startups that assume the U.S. is an open playing field often face a tough reality: success comes from knowing exactly what gap you are filling and why your solution is the best.
The U.S. market is complex, but not impossible to navigate. The startups that thrive are those that do their homework, adapt to consumer expectations, invest in financial sustainability, and differentiate themselves from competitors. Expansion isn’t just about crossing borders, it’s about breaking through barriers with the right mix of strategy, flexibility, and execution.
How European Startups Can Win in the U.S. Pet Healthcare Market
THAVMA INSIGHT: Breaking into the U.S. market demands a well-planned, strategic approach. Startups that thrive are those that navigate regulations carefully, align with consumer expectations, ensure financial sustainability, and offer a truly differentiated service. Success in the U.S. isn’t just about entry; it’s about breaking through the competition and building long-term impact in a rapidly evolving industry.
Expanding into the world’s largest pet healthcare market is an exciting opportunity but it comes with a unique set of challenges. While innovation and ambition are crucial, they alone aren’t enough to ensure success. The startups that thrive are those that understand the complexities of U.S. regulations, align with consumer expectations, manage financial risks, and differentiate themselves from a crowded field. Here are four of the biggest barriers that European veterinary startups face—and the strategies needed to overcome them.
1. Navigating Regulatory Complexity
Unlike Europe, where veterinary laws are often standardized, the U.S. operates on a state-by-state basis, each with its own licensing, telemedicine, and insurance regulations. This fragmented system creates a major compliance hurdle for startups.
For example, Veterinary-Client-Patient Relationship (VCPR) laws require an in-person exam before telehealth services can prescribe treatment in many states. Companies that don’t account for these legal nuances risk costly delays, operational setbacks, or even being blocked from certain states. The key to success? Developing a phased market entry strategy, working with regulatory experts, and securing partnerships with U.S.-licensed veterinarians to ensure compliance.
2. Adapting to U.S. Consumer Expectations
A great product or service isn’t enough success depends on meeting the expectations of U.S. pet owners. American consumers demand high levels of customer service, with 24/7 availability, instant access to veterinary care, and seamless digital experiences.
Many European startups underestimate the level of service and responsiveness required to build trust in the U.S. market. Investing in localized marketing, customer engagement, and fast, accessible service can make all the difference. Startups that take the time to understand what American pet owners truly value will have a much stronger foothold in the market.
3. Managing Financial Risks and Costly Missteps
The cost of expansion into the U.S. is often higher than anticipated, and financial missteps have derailed promising startups. Labor costs, marketing expenses, and customer acquisition in the U.S. are significantly higher than in many European markets.
Additionally, incorrect pricing models can make it difficult to achieve profitability. Some companies enter with European pricing structures that don’t align with U.S. consumer expectations or veterinary cost structures, leading to unsustainable margins. The startups that succeed take a data-driven approach to pricing, secure strong financial backing, and ensure they have enough capital to sustain long-term growth.
4. Standing Out in a Competitive Market
The U.S. pet healthcare industry is already dominated by well-established players. From telehealth to insurance and diagnostics, startups must fight for attention in a space where consumers and veterinarians already have trusted providers.
The biggest mistake a company can make is entering the market without a clear competitive edge. Simply offering another telehealth service or insurance option isn’t enough companies must identify what makes them different and valuable. Whether through cutting-edge AI diagnostics, flexible pricing models, superior customer experience, or strategic partnerships, startups must carve out a unique position that compels customers to switch from incumbents.
Lessons, Growth, and the Path Ahead for Veterinary Innovation
European veterinary startups have made significant inroads into the U.S. market, but the journey has been marked by both successes and setbacks. The lessons from 2020–2024 highlight that strategic partnerships, regulatory foresight, and market adaptability are key to long-term success. As the pet healthcare industry continues to evolve, those who balance innovation with operational sustainability will be best positioned for continued growth.
Stay tuned for deeper dives into specific case studies and emerging trends shaping the future of veterinary services.
(Sources: news.crunchbase.com, dvm360.com, avmajournals.avma.org, einpresswire.com, insurtechdigital.com, globalpetindustry.com, tech.eu, eu-startups.com, pitchbook.com, uktechnews.info, healthforanimals.org, naphia.org)
Update: The research report is coming soon! "Beyond Borders: The European Veterinary Market Entry Handbook for U.S. Expansion (2020–2024)". STAY TUNED for a full review of research findings and in-depth data analysis.
If you haven’t yet explored our previous Thavma Insights editions, now is the perfect time!
Let’s connect on LinkedIn: Fotine A Sotiropoulos.
