- SoftBank's Vision Fund is giving up its nearly 50% stake in the dog-walking startup Wag, as the company continues to struggle.
- A memo circulated among Wag employees informed them that the company was parting ways with SoftBank and cutting a significant number of jobs. The news was first reported by the Wall Street Journal's Cara Lombardo.
- The dog-walking startup has faced significant obstacles lately, including the departure of its former CEO Hilary Schneider last month. This happened while the company reportedly shopped around for buyers and sought to sell itself for a lower price than its original valuation, according to Bloomberg.
- SoftBank's Vision Fund invested $300 million in Wag last year, an investment that has drawn close scrutiny lately after a series of high-profile investment flops, like WeWork's implosion, have left the company reeling.
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SoftBank is selling back its nearly 50% stake in Wag to the embattled dog-walking startup, while the startup struggles to turn around its performance.
Wag CEO Garrret Smallwood circulated a memo around the company on Monday, informing employees that it was cutting jobs and it was was "amicably parting ways" with SoftBank. SoftBank was also giving up two seats on the board.
The news was first reported by the Wall Street Journal's Cara Lombardo,who wrote that SoftBank was selling the shares back at a price "well below" the $650 million valuation that Wag commanded when SoftBank bought the shares last year.
"Today, we said goodbye to a number of our friends and colleagues as we align our organization with the needs of our business," Smallwood wrote in the internal memo, reviewed by Business Insider. "This was an extremely painful and difficult step. But it was also an important one for our future." Wag declined to comment on how many employees were laid off, or disclose any further financial details.
SoftBank's Vision Fund first invested in the dog-walking startup last year in January, pushing up the company's valuation to around $650 million. But the startup has struggled to compete, and sought to sell itself beginning this fall. Smallwood only became the Wag's CEO last month, after the company's former CEO Hilary Schneider left to join another firm.
SoftBank's Vision Fund investments have drawn close scrutiny over the past few months, after a series of high-profile investments flopped and left the company reeling, like WeWork's pre-IPO implosion this fall. SoftBank's Masayoshi Son seemed to express concern about Wag in his latest investor presentation, as he referred to a dog-walking company as one of Vision Fund's more troubled investments.
SoftBank's sale of its stake followed a disagreement within the company's board on its path to future profitability, one person familiar with the talks told Business Insider.
SoftBank's Vision Fund did not respond immediately to a request for comment.