Dog walking startup Wag gave in to pressure as it upped its next funding target and is now set to accept $300 million from SoftBank, Recode reported earlier this week. The Los Angeles, California-based company was originally only seeking to raise an extra $100 million but was talked into receiving a larger check and making significantly more ambitious near-term plans by the Japanese technology giant whose very interest in the firm scared off many other potential investors, insiders said earlier this month. SoftBank's Vision Fund valued at nearly $100 billion is almost exclusively seeking major investments and deemed Wag's $100 million target not ambitious enough, according to recent reports.
SoftBank's decision to back Wag still doesn't perfectly fit its modus operandi that has so far circumvented businesses that aren't "unicorns," i.e. private startups with valuations over $1 billion. The conglomerate's financial commitment hasn't pushed the firm much closer to such a figure as it only valued it at $650 million, Recode reported earlier this month. The move will effectively provide SoftBank with an approximately 45-percent stake in Wag without allowing any of the startup's previous investors to cash out, hence not being a conventional venture funding round companies usually go through when trying to raise more resources, one insider familiar with the transaction claims. Wag is also replacing its Chief Executive Officer Josh Viner with Hilary Schneider, though the co-founder and his brother Jon insist the move isn't directly related to the investment and its timing is just a coincidence. Some sources suggest that while that may be the case, SoftBank was much more comfortable about making the investment with Ms. Schneider at the helm.
The Japanese firm and its fund are almost exclusively making large bets as they're solely seeking massive returns, meaning Wag would have to grow in a rather aggressive manner for the investment to pan out in the near future. While Ms. Schneider has vast experience with leading such endeavors, having previously presided over Yahoo's Americas division and LifeLock which Symantec acquired for $2.3 billion in 2017, the Viner brothers do not. As the move isn't buying out any previous investors, it's effectively taking the corporate influence away from its co-founders and giving it to SoftBank. The brothers are still set to stay with Wag and accept senior, product-related roles that are yet to be defined but are unlikely to be able to independently make any business decisions going forward, filling just two out of eight seats at the startup's board. Wag is presently offering its dog walking service in the form of a mobile app for Android and iOS devices, with the company being set to continue competing with larger startup Rover.