Investor in cat DNA testing start-up business made about $2.4 million when it was sold

NEWS and COMMENT: There is clearly a lot of money in DNA testing of cats. Kevin O’Leary had a hunch that his investment into a start-up company at the time called ‘Basepaws’ would make him a lot of money. O’Leary was taking part in an American reality TV programme called ‘Shark Tank’. It’s a spin-off from Britain’s Dragons’ Den. It’s actually a franchise from the British television show.

Kevin O'Leary.
Kevin O’Leary in 2012 – 11 years ago please note. See base of article for picture credit.
Two useful tags. Click either to see the articles:- Toxic to cats | Dangers to cats

And in that show O’Leary was one of the sharks or dragons and he said that the pitch for investment by the owner of Basepaws, Anna Skaya, was a bit wild but he was taken in. He said: “It was such a crazy pitch, I bought it anyway”.

The owner was asking for $250,000 in exchange for a 5% stake in her business (I don’t know if it was a registered company at the time). O’Leary and another ‘shark’ (investor taking part in the television show) agreed to invest $125,000 each for a 5% stake each. This valued Basepaws at $2.5 million.

Moving forwards, Basepaws was bought by Zoetis, an animal-health company with an $80 billion market capitalisation. It is believed, that they paid $50 million for Basepaws. This is a conservative estimate.

As O’Leary invested $125,000 for a 5% stake, he would have made $2.4 million on the sale. This would be a 20 times return on his investment ignoring dilution which I presume means inflation.

O’Leary said that he invested $50,000 for a 3.5% stake, in which case he would have pocketed $1.7 million representing a 35-fold return on his investment.

If Zoetis paid the full $93 million for Basepaws O’Leary could have walked away with $3.2 million or $4.5 million depending on the terms of his investment. In short, it was a great investment and easy money. We don’t know how he contributed to the growth of Basepaws. A reason for start-ups pitching their business to these business experts is to get them to help them grow the business with advice.

MOST ADVANCED CAT DNA TEST - The Basepaws Breed + Health Cat DNA Test gives you answers specific to your cat’s breed composition, traits, and health. Learning more about their unique needs, personality, genetic predispositions, and dental health can help you make proactive choices that support your cat’s health so they live a longer, happier life. Most advanced and comprehensive cat DNA test on the market. As seen on Shark Tank and Ellen’s List.
From Amazon: “MOST ADVANCED CAT DNA TEST – The Basepaws Breed + Health Cat DNA Test gives you answers specific to your cat’s breed composition, traits, and health. Learning more about their unique needs, personality, genetic predispositions, and dental health can help you make proactive choices that support your cat’s health so they live a longer, happier life. Most advanced and comprehensive cat DNA test on the market. As seen on Shark Tank and Ellen’s List.”

But clearly there is money in DNA testing of cats. It is a growing field and I bump into these businesses in writing for my websites. A lot of people want to know, for example, whether their cat is a purebred cat and there are DNA testing companies who will tell them.

And there are many owners of purebred cats who want to know whether their cat is predisposed to a certain inherited illness which can be detected through DNA testing. Most, perhaps all, purebred cats inherit certain, set illnesses in their genes. This is because of selective breeding which is another phrase to mean inbreeding which brings out these diseases. Some breeds are very sadly and badly predisposed to several sometimes serious inherited conditions. Take the Maine Coon for example – click this to read about them.

Often, they are imported into offspring in mutated recessive genes which would normally been dormant but which become active through inbreeding. It is a great stain on the cat breeding community. It’s due to the cat associations producing guidelines in breed standards which demand certain feline appearances and breeders in trying to attain those appearances have to inbreed them and so they perpetuate the diseases of the foundation cats.

The only way to remove this problem is to outcross to non-purebred, healthy cats to freshen up the blood line but they won’t do that because it destroys the desired appearance.

Picture credit: By Randstad Canada – Flickr, CC BY 2.0, https://commons.wikimedia.org/w/index.php?curid=46478414

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