Pets at Home has taken a stake in the dog-walking and pet-sitting service Tailster.com, aiming to take a slice of a market estimated to be worth £1bn.

Tailster uses a network of 26,000 self-employed pet carers across the UK, which it connects with customers via an app that offers GPS tracking of dog walks, real time photos and free insurance.

The UK’s biggest pets retailer will offer Tailster’s services to its 4.4 million loyalty scheme members as part of its aim to fight off competition from online competitors, including Amazon, by generating half its revenues from services, up from about a third today.

The market is growing fast as the under-40s splash cash on pets, which they increasingly see as family members.

Pets at Home shares have recovered in recent months as trading improved after profits took a hit from a restructuring of its vets business.

The company has spent millions of pounds buying back some practices that had been run as joint ventures and has closed at least 19 others since November. Services are already a core part of the business, including more than 300 grooming salons in stores and stakes in specialist pet hospitals.

No details of the Tailster deal have been revealed but Peter Pritchard, the chief executive of Pets at Home, said the investment was “a win-win deal, good for both businesses but especially good for owners searching for someone they can trust to look after their much-loved pet”.

Tailster was founded in 2014 by Indy Sangha and had raised $640,000 (£510,000) in funding for the business before Pets at Home’s investment, according to the tech startup site Crunchbase.

Sangha, the Tailster chief executive, said the company was aiming to consolidate a fragmented market: “Not only do the team at Pets at Home share our vision about how we can bring our services to UK pet owners and drive the growth of our business, but they also share many of our values of putting pets first, and the customer at the heart of what we do.”