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Wednesday, March 13, 2013

United Dogs and Cats : 650,000 euros of Failure

So Long, and Thanks for all the Euros!

It looks like United Dogs and Cats (UDC) is shutting down for good. Two weeks ago, the main person (Kristiina Kala) behind what's left of the project announced her departure on Facebook:


A Brief History of What Could Have Been

Back in 2008, the site, which is a social network for pet owners, was widely heralded as the next great Estonian innovation, ready to take the world by storm. According to a press release where they announced their $235,000 investment, the CEO of ASI, Tauno Tats: "UDC has a monolithic team that can guarantee fast growth and be successful in putting all pets in the world to the web."

One of the UDC founders, Ragnar Sass, was hailed by the press as part of the new generation of Estonian entrepreneurs ready to take on the world. (Never mind that his previous ventures, the web portal uno.ee and the TV station Neljas, are both no longer in operation.)

In 2009, ASI increased their investment and also convinced the state-owned Estonian Development fund to come in, with a total additional investment of 480,000 EUR. Your taxpayer money at work!

That brought the total investment to 650,000 EUR. That's a significant sum, and by our estimates, fewer than 10 Estonian startups have ever received investments at that level or above. With the great team Mr. Tats alluded to above, along with all this money, surely that's a recipe for success, right?

Wrong, of course. Within one year, the company laid off all its workers. According to the business registry, the company was finally dissolved in May 2012. (The portal was then taken over by a new corporate entity, United Pets OÜ, which seems to have no connection with the founders.)

Our Take

We really like the idea of a social network for pets. Pet owners typically consider their pet as a family member, and they're also willing to spend good sums of money on products for their pets. There are many opportunities to tie this together, like to offer products based on the type of dog the user has.

We think the failure here was a failure in execution, and not a bad idea. Unfortunately, we see this all too often with Estonian companies that have a good idea but fail to make it a success on the world market. Both Rate.ee and Now Innovations (ParkNow) come to mind as examples, and we'll provide our analysis of both those companies in the future.


  1. It's really sad what is happening with all this EU money. They know from the beginning none of these companies have a chance, while the roads, health care, and education slide down the drain.

    Why give this kind of money to incompetent individuals, and teams, vs. put this money into competent people that can actually create jobs for Estonians in the future. All of these failed companies, will then just pocket the cash, and move overseas to find a job, leaving Estonia jobless. Maybe they learned it from all the other business men in Estonia abusing EU funds, and moving to Switzerland.

    The worst part is, new startups look up to these companies as role models, not realizing they are just hyped up companies that never produce revenue.

    SAD SAD SAD There should be some investigations as to where all this EU money is going to, and trace how many of these companies have a "CEO" that has many roles in many companies. Without paying your teachers better, and building roads for the future.... There is no future with this type of corruption and misuse of EU funds. I'm still looking for businesses that are not built on scamming EU funds, and revenue.

    1. If the tax money is wasted on people, who create AT LEAST SOMETHING, even if the project financially burns, then it's far better spent than wasting the money on government bureaucrats. The same thing with the "free" public transport in Tallinn: it's better if the tax money is wasted by providing at least something back to the people, from whom it was robbed rather than having the government officials waste it on party events and fun travel trips and nice lunches at "cooperation conferences".

      There are a lot of people, who enjoy the life of a government agency employee, who just needs to be in the office by 8 o'clock in the morning and does not have that much responsibility to achieve anything. We are all better off, if some of those people, who would otherwise work in a government agency, work in a burning, hopeless, tax-money-financed, start-up, where they, unlike at the government office, have at least some obligation to CREATE SOMETHING USEFUL, in stead of just spending time in the office. To put it in another way, if the euros that are spent on a ministry department were all taken away from the ministry department, ministry employees were dismissed from the ministry and re-hired by a burning, hopeless, financially not viable, start-up that is financed by the same money that was "left over" by dismantling of the ministry department, then far more useful work gets done for the tax-money.

      That's the reality part. A perfect solution is described at

      What are Your counter-arguments to THAT???!! :-D

  2. I think Now! Innovations signed a big contract with BMW just the other day. So I would wait a bit with the dooming verdict for them.

  3. Uniteddogs and unitedcats has a large number of users who would like to see this site saved. Surely with over 300,000 users, some more active than others pet shops and outlets would be interested in keeping the site going and advertising.

  4. indeed the issue was the execution and they wanted to expand to above all sell too fast without any previous analysis.In Estonia it was well known and working rather well.
    The issue is they thought because they had 10 000 users in Spain or France it was huge... Estonian companies were happy to buy some advertising on the site as it was a pretty unique network. However abroad this kind of things already existed and were much bigger. They should have spent their money trying to grow their member base instead of paying people to achieve sales.