Cat DNA

Have you ever been interested in your cat’s breed? If so, would you be willing to pay money to find out? How much? What if I told you that technology exists today that can estimate your cat’s breed?

Americans spend generously on their pets. In 2022, spending reached $136.8 billion. Roughly 66% of households are pet owners, and an average dog owner spends $1,533 annually on dog-related items. Most people consider their pets members of their families and spend a significant amount of money on them, even when they themselves are in dire conditions. This is where Anna Skaya, the founder of Basepaws, saw an opportunity. Coming from a marketing background, she realized there was an untapped market for genetic tests for pets, especially cats. After a brief conversation with Anne Wojcicki, the CEO and founder of 23andMe, she decided to pursue cat genome testing.

The company’s business model focuses on selling sequencing kits. They’re shipped straight to the customer’s door in the form of a swab. Once the swab is collected, it’s sent back to the lab, where the genome is sequenced. Once processed, your cat’s genetic information can be displayed on a website. At different price points, there’s a variety of tests available—from an Oral Health Check to a Health and Breed Check to a Whole Genome Sequencing test, the last one costing $500 per kit.

The company claims its results come from the advanced techniques they use, such as Low-Pass Whole Genome Sequencing and Next Generation Amplicon Sequencing. This technology allows for relatively quick and easy detection of genes in well-known areas. That technology is what has allowed the test kits to be relatively affordable for the end consumer.

Basepaws raised money in multiple waves of funding. The founder pitched her idea on “Shark Tank.” Her efforts were successful: two of the sharks, Kevin O’Leary and Robert Herjavec, both invested $125,000 for a 5% stake in the company. A few years later, the company was bought out by pharmaceutical company Zoetis for a publicly reported “over $50 million,” likely closer to $93 million according to some reports.

Where does the value of the company come from? Basepaws is quite generous with what data it decides to keep after you receive your results. In the company’s Terms of Service, it makes it clear that by signing up for the service, you grant the company “an irrevocable, perpetual, royalty-free, worldwide and sublicensable right” to your pet’s genetic information, which can be used for any purpose the company deems acceptable, with a limited use right for the consumer. That allows the company to pitch its datasets to pharmaceutical companies or other research institutions, which are able to license them for research purposes, most likely charging a significant fee in the process.

If we draw parallels to 23andMe, the company that inspired Basepaws, we can see that the current situation might be quite challenging. In the post-quarantine era, the fad of gene-testing kits has waned, leaving the company with declining revenue growth. 23andMe, in a quest to find alternative revenue sources, started offering subscription services for continuous health check-ups and tips. That did not catch on, and the company had to terminate the service after two years. As of recent reports, the company is facing financial difficulties, with its stock price declining significantly from its initial IPO listing. 23andMe is also considered valuable due to its extensive collection of customers’ genetic information.

Both of these companies aim to use the data collected for different scientific endeavors, such as drug development and early health screening. The health screening aspect is included in their base packages, and that is probably what most customers will be receiving. Basepaws is quick to point out, though, that all the health information provided by them is for educational purposes only and not a replacement for a discussion with an animal healthcare professional. As for the drug development part, Basepaws is currently running some clinical trials using the data collected, although it is unclear whether any have been successful.

As for 23andMe, in 2023 the company attempted to pivot more towards in-house drug development. However, more recently, the CEO informed investors of halting this initiative to instead focus on selling its data to pharmaceutical companies.

The question of data privacy arises then: Is it okay for a private company to own your genetic information? Since the rise of 23andMe, many American states have introduced much stricter legislation regarding data handling and privacy. New laws were introduced that would require customers’ consent in case of a potential sale. The same privacy restrictions currently do not apply to pets and other animals. Companies collecting that data can collect and sell your pet’s data more easily than human data. That raises a concern about the security of your pet’s private information. While not as dire as in the human case—where such information can be used, for example, to discriminate in court or target specific ethnic groups—according to the current Terms of Service of Basepaws, you’re not the legal owner of your pet’s genetic information once you purchase their service.

In conclusion, we should really think about what companies we share our most sensitive information with. Companies such as the ones listed above exploit the lack of regulation when it comes to critical genetic information that is not only ours but also belongs to those closest to us. Going forward, we should reassess how we regard data privacy of our pets, making sure we know what we consent to.

Maciej Robert Szczesny