The archive · Hardware & Devices · Product decision · 2013–2016
Petcube's YC W16 bet on interactive pet hardware: 20,000 cameras sold, $2.5M revenue
Petcube made a $199 Wi-Fi pet camera with a built-in laser and two-way audio, sold 20,000 units and hit $2.5M revenue before YC W16 Demo Day.
Petcube
What the business is
Petcube sells the Petcube Camera, a $199 Wi-Fi camera with HD 720p video, a microphone and speaker, and an app-controlled laser toy, so owners can watch and play with pets from anywhere; a subscription service and a connected treat dispenser were next.
Starting capital：Total venture funding of $3.8M by February 2016, including a $2.6M round from Almaz Capital, Y Combinator and AVentures Capital; Kickstarter had earlier raised over $250,000 against a $100,000 goal.
How it started
The idea came from co-founder Alex Neskin's puppy Rocky, who suffered separation anxiety and boredom when left alone. Neskin, CEO Yaroslav Azhnyuk and Andrey Klen started in the HAXLR8R hardware accelerator in 2013 with an internal mantra that products for pets should be designed with as much care as products for humans. A Kickstarter for the Petcube Camera blew past its $100,000 goal to raise more than $250,000, validating that staying connected with a pet during the day was something owners wanted.
What happened
Petcube joined Y Combinator's Winter 2016 class. In February 2016 it raised $2.6M from Almaz Capital, Y Combinator and AVentures Capital — $3.8M total — to expand distribution and keep building pet products. By Demo Day on 2016-03-22 the $199 camera had generated $2.5M in revenue over 15 months with 20,000 units sold; it was in more than 400 stores including Nordstrom, Best Buy and Brookstone, with over half of sales from retail. About 30 U.S. shelters installed Petcube cameras so the app community could watch adoptable pets, and the company was adding a subscription service plus a connected treat dispenser.
No ending yet — it is still running.
Background
Petcube started with co-founder Alex Neskin's puppy Rocky, who suffered separation anxiety and boredom when left home alone. With CEO Yaroslav Azhnyuk and Andrey Klen, Neskin entered the HAXLR8R hardware accelerator in 2013 on the mantra that pet products should be designed with as much care as products for humans. The Petcube Camera is a $199 Wi-Fi device streaming HD 720p video with a microphone, speaker and app-controlled laser, letting owners watch, talk to and play with pets remotely.
A Kickstarter for the camera raised more than $250,000 against a $100,000 goal, proving demand before retail. Petcube joined Y Combinator's Winter 2016 class and raised $2.6M in February 2016 from Almaz Capital, Y Combinator and AVentures Capital, bringing total funding to $3.8M for distribution and new products. By Demo Day on 2016-03-22, the company reported $2.5M in revenue over 15 months and 20,000 units sold at $199.
Distribution was already retail-heavy: more than 400 stores, including Nordstrom, Best Buy and Brookstone, with over half of sales coming from stores rather than the web. Roughly 30 U.S. shelters ran Petcube cameras so the app community could watch adoptable pets, and the company was launching a subscription service and a connected treat dispenser to move beyond a single hardware sale.
What has to be true
- Neskin built for his own puppy's separation anxiety — a concrete, personal problem that made the product's value obvious to other pet owners.
- Design quality was the wedge: the founders' mantra was to build pet products with as much care as human products, differentiating Petcube from early pet-tech gadgets.
- Kickstarter acted as pre-order validation, and over-funding against the goal made the retail and venture pitch credible.
- The plan to compound beyond one $199 device — subscriptions, an app community, shelters and a treat dispenser — was the hedge against being a single-SKU hardware company.
What can be applied
A founder's own problem can seed a hardware company, but crowdfunding validated demand, retail distribution scaled it, and a subscription layer turns a single gadget into a recurring business.
Aftermath
As of 2016-03-22, Petcube was scaling: 20,000 cameras sold at $199 with more than half of sales through 400+ US retail stores, and $3.8M in total funding banked for distribution and new products. The company was adding a subscription service and a connected treat dispenser, and its app's shelter-camera network gave it a community layer beyond individual owners.
Sources
- All 60 startups that launched at Y Combinator Winter 2016 Demo Day 1
- Petcube Scoops Up $2.6 Million So You Can Entertain Your Pet From Anywhere
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