SoftBank Parts Ways with Dog-Walking Startup

Japanese company SoftBank has decided to give up its stake in Wag Labs, Inc., a US-based dog-walking startup. In early 2018, SoftBank invested $300 million in Wag!, an app that matches dog owners with available dog walkers in the area. However, after a series of mishaps, the company decided to part ways with the startup. Sources speculate that SoftBank will be selling its shares in Wag for much lower than $650 million, the valuation of Wag in 2018. Wag’s CEO Garrett Smallwood also announced that SoftBank will no longer have seats in Wag’s Board of Directors. Wag’s operation uses an on-demand business model similar to that of Uber, a ride-hailing company. The startup was envisioned as an up-and-coming technology-based business, but some investors had greatly scrutinized SoftBank’s decision to invest such a large amount in a small startup. Even with SoftBank’s investment, though, Wag struggled to keep up with its competitor, Rover Inc. Wag also underperformed financially, endured a series of layoffs, and even lost dogs. Eventually, the startup changed CEOs, but the new CEO disagreed with some of the startup’s strategies. Wag was also discussing a possible sale with two pet companies, but the discussions did not get far. After SoftBank’s pullout, Wag decided to save its business by cutting jobs. Wag confirmed that it will be closing down one out of its three offices, in which around 90 employees will be affected. Smallwood claims that the layoffs are painful but necessary to secure a bright future for the company.