Editor’s note: This article is part of a series of profiles highlighting successful Ukrainian startups and businesses. The series is funded by the regional investment fund Ukraine-Moldova American Enterprise Fund (UMAEF) and created in partnership with Spend With Ukraine, a non-profit organization that launched a platform to showcase businesses with Ukrainian roots and provide one more meaningful way to support Ukraine – by choosing to spend with Ukraine. The series’ sponsors are not involved in the editorial process of the writing of these profiles.
Alex Neskin’s chihuahua puppy constantly whined every time he left the house. Not wanting angry neighbors banging on his door, the Kyiv-based entrepreneur devised a toy to distract Rocky, the puppy, when he was at work.
Neskin attached a camera with a laser pointer on top of a motor. He could move the laser remotely via a web browser and keep an eye on Rocky through the camera. Soon, the puppy felt more relaxed at home alone by playing with the laser’s red dot.
Realizing nothing else like this existed on the market, Neskin saw an opportunity to scale up his rudimentary toy. Alongside co-founders Andrey Klen and Yaroslav Azhnyuk, the trio created Petcube, a multimillion-dollar company that has sold nearly 1 million products worldwide since its founding in 2012.
A decade ago, the pet market was “old fashioned” and ripe for innovation, according to Klen.
Petcube was the first company in the pet-tech sector, a growing market globally as people adopt more “smart” technology into their lives.
“The primary focus of our research is that the pet market was and still is recession-proof. It is growing every year because we care about our pets and there's no reason for that to go down,” Klen, who is also the company's CMO, told the Kyiv Independent.
Over 12 years, the company has attracted more than $24 million in investments and created a range of products from basic home cameras to a remote-controlled treat dispenser. Now the company is developing its AI model to pick up pets’ health issues.
Leap of faith
The trio was in their 20s when they traveled to tech-haven China to see if manufacturing a laser-camera toy was technically feasible. It was, but the group still didn’t see any real likelihood of the idea taking off.
To understand if there was a demand for the product, the group launched a Kickstarter campaign promising a slick cube with built-in speakers, microphone, camera, Wi-Fi, and laser pointer linked to an app. Over 42 days, Petcube attracted a record-breaking $251,000, surpassing its $100,000 target. It was the most money for any pet-related product on Kickstarter.
However, the founders had no clue how to bring the prototype to scale. They took a leap of faith and returned to Ukraine to figure out the manufacturing side, fueled by the positive reception on Kickstarter.
“It was really scary. But there was no way back, in a good sense,” Klen said.
After unsuccessful attempts to launch manufacturing in Ukraine, they found a Ukrainian partner with contract manufacturing experience in China. With an additional $500,000 from AVentures, a venture fund, Petcube launched its assembly line and production in China.
The product took over two years since its inception to hit the market in 2014 as the company ran into numerous issues with the manufacturers. In one instance, the factory executive lost some tools in a mahjong game. The first run of Petcube cameras also had sharp aluminum edges that could “slice a finger in two,” according to Klen.
The products have since been perfected, with over five different electronic devices available on the company’s website ranging from $30 to over $100. Even celebrities like Oprah and Emma Watson have praised Petcube.
Users can use the app to watch or play with their pets when away from home. Petcube’s camera products also record meows or barks and alert users if glass is broken or the fire alarm goes off.
Going Global
Petcube is headquartered in the U.S., but most of the company’s 60 employees remain in Ukraine. The U.S. market, which consists of 85 million pet owners, was the first target and still makes up 80% of sales typically through online realtors like Amazon.
The year following the 2020 pandemic led to a boom in demand particularly for the Petcube Cam, a simple $40 camera and the company’s most popular product.
“There was a big surge for our business because people rejoined the workforce and all the pets stayed at home alone,” Klen explained.
The company expanded first in Australia and then Europe, selling products largely through brick-and-mortar stores. Now, Asia and South America are on the horizon as the company’s sales near 1 million.
Petcube does not have a physical headquarters, as it moved to remote working during the pandemic. Employees work remotely across Ukraine, Europe, Asia, and North America. A team in China manages the factories.
However, amid rising tensions between the U.S. and China, Petcube is considering relocating manufacturing to India, Mexico, or Vietnam.
Under Donald Trump’s presidency, it was difficult for some companies with Chinese components to enter the U.S. market. Petcube is concerned about bans on Chinese products, CEO Anastasia Kukhar said. But the move would increase production costs.
“We were thinking about building some production in Ukraine in 2021. But, it doesn't seem realistic right now,” she said.
War-time innovation
The company has not stopped working since the start of the full-scale invasion. Instead of productivity dropping, Kukhar describes a motivated “productive anger” in the team.
The team had to convince partners that the company was stable and not a risk to investors, something they had to do back in 2014 after Russia’s first invasion of Donbas and annexation of Crimea.
Ukrainian team members were safely evacuated at the start of the war and Petcube provided portable power stations to employees struggling with blackouts. The company also donates to the Armed Forces and UA Animals, an NGO that helps animals during the war.
However, the global economic fallout has slowed down the company’s growth over the last two years following the pandemic boost. Nonetheless, Kukhar says the “greatest achievement” is that sales aren’t declining.
Even during the war, Petcube continued to launch new products and earlier this year introduced a GPS tracker — a market valued at $3.1 billion in 2023. To sustain inspiration, the company listens to its customers to improve and develop products.
“If you're able to listen, you're able to innovate,” Klen said.
The latest product, Flock Assembly, takes the company on a new path and is aimed at businesses rather than consumers. Initially delayed because of the war, Petcube announced this month that it will offer its services to help other companies produce their own cameras and GPS trackers.
The success of Petcube has urged other companies to follow suit in the pet-tech sector. Now, Petcube is competing with the likes of Google and Amazon who target their generic home cameras to pet owners, eating a chunk of Petcube’s business.
Petcube says its advantage is its diverse, pet-specific portfolio which it consults with vets and animal experts. The company is currently training its AI model with the data it’s collected to spot when a pet is behaving abnormally, such as vomiting or unusual tail wagging, and notify the owner that something could be wrong with their health.
“Technology evolves and people and companies will find new ways to make sure their pets are safe and sound,” Klen said.
Petcube shows how Ukrainians turn challenges into solutions, revolutionizing the fields of pet technology and smart home devices in the process. Check out Spend With Ukraine to discover more businesses like theirs — by supporting local goods and services, you’re building a stronger, more resilient Ukraine.
Liliane Bivings
