How Galaxy Vets Is Democratizing Wealth In The Veterinary Industry With Employee Ownership – Forbes

Staff at Danville Family Vet, a veterinary hospital in Virginia powered by Galaxy Vets.

Von Wellington Photography

A recent article in Financial Times caught my attention. Titled “Lipsticks, lattes … and now labradors: JAB’s bet on pets”, it brings to light the massive infusions of private equity capital into the veterinary healthcare industry. Corporate takeovers have become so aggressive that they are now generating a lot of work for antitrust regulators in the U.S. In this particular case, for the second time in a month, the U.S. Federal Trade Commission ordered JAB Holdings to divest its veterinary clinics in several states due to antitrust law violations. The German conglomerate that operates in the areas of consumer goods, coffee, and luxury fashion, and has invested over $9 billion in acquisitions of veterinary clinics across the globe, is one of many private equity firms rolling up animal healthcare providers in the U.S.

Reading further, I discovered that the amount of private equity investment in the veterinary industry reached a record $18.4 billion in 2020. While I have written about new business models in veterinary care previously, this article got me thinking about the industry more generally and in particular, who actually owns veterinary medicine? And does it have anything to do with the worrisome reports about the all-time high burnout rate in the veterinary profession?

I decided to talk about these issues with Dr. Ivan Zak, a veterinarian, entrepreneur and a former executive consultant to corporate groups. Dr. Zak has worked with dozens of veterinary consolidators in the U.S. before he launched his own veterinary clinic startup, Galaxy Vets, with a promise to give veterinary medicine back to veterinarians.

“Currently, around 25% of veterinary hospitals in the U.S. are consolidated,” he told me. “According to some estimates, 1-in-3 dollars spent on pet care goes into a corporate pocket. There are approximately 50 consolidators (most of which are backed by private equity capital) shopping for practices. The problem with this is that these institutions are detached from the realities of the veterinary profession. Limited by a 3-5 year investment horizon, they prioritize generating returns and often overlook the employee well-being or quality of patient care. When you are here to play the short game, you are not interested in building a sustainable business,” he concluded.

Building organizations with people in mind is what Dr. Zak told me he was trying to help veterinary consolidators do with his previous consulting firm, Veterinary Integration Solutions. He created an operating framework that would help corporate groups with enterprise management while improving the employee experience. But he admits to having wholly failed in finding a demand for the burnout prevention component. “Consolidation can be …….