SoftBank Curbs Serious Capital With Wag Labs
It wasn’t so long ago we heard about a major problem at Wag Labs, a company that works to connect dogs with dog walkers, that left more than a little customer information exposed. In a new twist, SoftBank has dropped $300 million into the company, and it wasn’t even the only choice of firms in the burgeoning pet care space that it was talking to.
Reports suggest that the deal came down to a choice of two firms: Wag Labs, or a Seattle-based startup called Rover that did something similar. Ultimately, SoftBank put its nine-figure commitment behind Wag, despite it being a company who just weeks prior revealed that it had accidentally put a large amount of consumer information on the web without even a password for protection.
As for why SoftBank chose Wag over Rover, that much is unclear; the sources who tipped off Bloomberg about this one requested anonymity, and official reps weren’t talking. It will likely help Wag going forward, though, that two SoftBank parties are joining Wag’s board: managing partner Jeffrey Housenbold as its new chairman and senior investor Ted Fike.
This is handy for Wag, as its previous chair Shervin Pishevar reportedly stepped down due to sexual misconduct allegations. Additionally, the company has been plagued by allegations that the dog walkers involved with Wag, despite vetting, have a distressing tendency to “lose dogs.” Back in October, reports emerged about a Wag-vetted dog walker who lost a Beagle-Labrador mix, and then tried to bribe the owner to keep quiet about it.
So what did SoftBank see in Rover that was so terrible that it made Wag, for all its problems, look good by comparison? For SoftBank to drop $300 million into a company, it’s got to be pretty carefully examined. Even a company like SoftBank can’t drop $300 million very regularly. Well, maybe it can; operating profit for the company was said to be around $9 billion with flat revenue growth, so it’s a safe bet the company had some ready cash on hand to disperse.
Either way, though, SoftBank is now in the pet care space and in a pretty big way. Only time will tell if this turns out to be a great move for the company or a disaster waiting to happen.