India’s Pet Economy, Yellow.ai Layoffs, and Instamart's New Play

The Indian pet-care industry has reached a significant turning point. Once viewed as a niche luxury for the elite, the sector is now securing substantial investment and demonstrating long-term market viability. When Heads Up For Tails moved toward a $25 million Series B, Supertails lined up a $15-20 million raise, and Drools turned unicorn with Nestlé backing, it wasn’t coincidence. It was the market signalling that pet parenting in India has become durable, repeatable consumption.

The numbers explain the optimism. India’s pet-care market is now worth $3.5-3.8 billion, up from under $1 billion a decade ago. Conservative estimates put it at $5-7 billion by 2030, while aggressive forecasts stretch beyond $20 billion if premiumisation and healthcare scale faster. Pet food still accounts for nearly 85% of spend, but the fastest growth is coming from adjacencies - vet care, grooming, supplements, insurance, and digital health. Online pet-care sales grew ~95% YoY in FY25, making it one of India’s fastest-growing consumer categories.

This growth is structural. Urban India no longer treats pets as guard animals; they’re increasingly treated as children. Over 70% of Gen Z pet owners are first-time owners, and millennials and Gen Z spend 50-100% more per pet than older cohorts. This mirrors the baby-care boom of the 2010s when consumption shifted from loose, unbranded products to packaged, subscription-led buying. The difference is frequency. Pet food is a monthly purchase, not an episodic one, which makes lifetime value far more attractive.

That’s what investors are really betting on. A pet parent acquired today is locked in for 10–15 years - food, vaccines, grooming, surgery, insurance, and end-of-life care. In the US, Chewy proved this model works, with over 70% of revenue from subscriptions. Indian startups want the same outcome, layered with services enabled by cheaper labour: mobile grooming, home vet visits, and hybrid clinic models that don’t exist at scale in the West.

But beneath the funding headlines, the economics are still fragile. HUFT’s losses crossed ₹76 crore in FY23 despite 45% revenue growth. Supertails nearly doubled revenue in FY24 but saw losses exceed ₹40 crore. Customer acquisition costs often sit between $30-90 per customer, and retention drops sharply after 12-18 months unless services are layered in. Selling food alone doesn’t build a moat. At best, it subsidises growth.

Quick commerce is accelerating this pressure. Blinkit, Zepto, and Instamart are fast becoming default distributors for pet food. If they control even 25-30% of distribution by 2026, D2C brands lose pricing power overnight. That’s why smart players are pivoting. HUFT is turning stores into experience centres. Supertails is leaning into pharmacy and tele-vet care. Vetic is betting that owning clinics, and therefore medical data, is the real moat.

The biggest threat, though, isn’t another startup. It’s Reliance, a deep-pocketed incumbent entering with a mass-pricing strategy. Waggies has already undercut premium brands by 20-50%, following the familiar playbook: compress margins, dominate mass adoption, and force everyone else upmarket. Mid-tier startups can’t fight this on price. Their only defence is depth - healthcare, data, insurance, and trust.

Globally, the pattern is clear. The US produced Chewy. Europe consolidated once growth slowed. India is heading for a hybrid outcome: two or three full-stack platforms, a few healthcare-first specialists, and mass distribution dominated by incumbents like Nestlé, Mars, and Reliance. Dogs still drive 85% of spending, but cats - growing at ~16% CAGR - remain the most under-exploited segment.

The pet-care boom is real. But this is no longer about toys and treats. It’s about owning health data, subscriptions, insurance flows, and long-term trust.

Let’s go through what else is happening in Indian startup world - Grab your simmering cup of StartupChai.in and unwind with our hand-brewed memes.

“Apna Apna Dekh Lo Sab”: Yellow.ai Lays Off Over 100 Employees Amid Automation Push

Yellow.ai has laid off over 100 employees, about 30% of its workforce, in phased cuts that largely impacted engineering and product teams as it sharpens its focus on automation.

This comes after a smaller round in August, when the enterprise AI startup trimmed 40 to 50 roles, making 2025 a year of repeated restructuring. Without confirming exact numbers, Yellow.ai attributed the move to shifts in the enterprise AI landscape.

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“Aasma Luck Aasma”: Swiggy Instamart Experiments With Physical Retail

Swiggy Instamart is quietly testing physical retail through a small, seller-owned and seller-operated store that mirrors its darkstore logic without owning the asset.

The 400 sq ft outlet is far smaller than a typical Instamart dark store, which usually spans 2,500 to 4,000 sq ft, signaling a low-risk, low-capex experiment. For now, Instamart’s role is limited to branding and backend services.

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“Kabhi Haan, Kabhi Na”: OYO Parent PRISM Gets Shareholders’ Nod For INR 6,650 Cr IPO

OYO’s parent firm PRISM has secured shareholder approval to raise up to ₹6,650 crore through a fresh issue of equity shares as part of its proposed IPO.

The green light was granted at an Extraordinary General Meeting held on December 20, 2025, giving the travel tech group a formal mandate to tap public markets. With this nod, PRISM now has the flexibility to time its IPO around regulatory clearances and market mood.

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“Dhandha Karna Hai Toh Bada Karo”: Tonbo Imaging Files DRHP For OFS-Only IPO

Tonbo Imaging has filed its DRHP for an OFS-only IPO comprising up to 1.81 crore equity shares, with no fresh capital coming into the company.

Investor CEAQ Technologies will offload the bulk of the issue at 1.5 crore shares, while promoters and promoter group entities plan to sell around 23 lakh shares. The defense tech startup says the listing is aimed at boosting visibility and brand recall.

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“Kaafi Phaila Hua Dhandha Hai”: Paytm Sets Up Two New Overseas Units, Raises Funds For UAE Unit

Paytm has announced the setup of two new overseas subsidiaries in Indonesia and Luxembourg, while also raising fresh capital for its UAE payments arm as part of a broader global rework.

The move comes via its cloud arm, which has approved the creation of the wholly owned units as Paytm quietly reorganizes its international footprint. As part of this reset, the company transferred its entire offline merchant payments business to PPSL in November.

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“Humari Bhi Haan Hai”: PayNearby Gets TPAP Licence To Offer UPI Payments

PayNearby has received a TPAP license from the National Payments Corporation of India, clearing the way for the fintech to offer UPI payment services.

Alongside the approval, the company has rolled out the PayNearby Saathi app to onboard users into the UPI ecosystem at the last mile. The move also nudges PayNearby a step closer to its planned IPO in FY27, with regulatory credibility now firmly in place.

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1. Prosperr.io has raised $4 Mn in a seed round led by Jungle Ventures, with backing from Yatra Angel Network, Sadev Ventures, and other investors. The AI-led tax infrastructure startup has now raised $5.55 Mn since 2022, quietly building plumbing for a country that still fears filing season.

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2. CoreEL Technologies has raised $30 Mn in a Series B round led by ValueQuest Scale Fund, with continued participation from 360 ONE Asset. The raise taps into India’s defence indigenisation push, as private capital lines up behind firms building complex, mission-critical aerospace electronics.

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