Wag, a dog-walking startup that once raised $300 million from a single investor, is going public through a SPAC
By Sara Ashley O’Brien, CNN Business
Wag, a dog-walking startup that once received $300 million from a single investor only to stumble in executing its strategy, is set to go public in a deal valued not much higher than that one investment.
Wag said Thursday that it has entered an agreement to go public through a merger with a special purpose acquisition company, known as a SPAC, at a valuation of $350 million. The combined company is expected to be named Wag! Group Co. and to list on the Nasdaq under the stock ticker “PET.”
Wag, which launched in 2015, followed a similar playbook to Uber by connecting pet owners to a network of pet sitters and dog walkers who are treated as independent contractors. The company scaled to 100 cities, attracted celebrity endorsements and, eventually, caught the eye of SoftBank’s Vision Fund, an investment fund known for cutting unusually large checks in startups to fuel their growth.
SoftBank poured $300 million into Wag in 2018, becoming its biggest backer, but things didn’t go as planned. The company struggled to keep up with its rival, Rover. Nearly two years later, SoftBank gave up on its investment but not without a series of missteps by Wag first.
As CNN Business reported in September 2019, Wag went through multiple rounds of layoffs, endured management changes, and failed to get its anticipated global expansion off the ground. Former employees told CNN Business that its then-CEO Hilary Schneider, a veteran tech executive who was tapped as CEO around the time of the SoftBank investment, had yet to get a handle on fundamental issues facing the business, including pet safety, customer service, and growth.
By December 2019, SoftBank abandoned the startup, selling its stake and exiting the board. Two weeks prior to the SoftBank pullout, Schneider departed the company. Garrett Smallwood, who previously served as VP of product, partnerships, and corporate development at the startup, took over the top spot.
Schneider said in a press release at the time that it was Smallwood who led what was then a new partnership between Wag and Petco, which was an early investor in Rover. She called him “the right leader to advance the company’s business priorities.”
That partnership also didn’t pan out. Petco, which no longer has a relationship with Wag, announced this week a partnership with Rover, which went public last summer through a SPAC valued at $1.63 billion at the time. Rover’s stock has suffered on Wall Street since then.
According to data from Bloomberg Second Measure, Rover’s foothold on the market remains strong: Rover earned 93% of the US consumer sales compared to Wag’s 7% in December 2021.
In a press release Thursday, Smallwood called the news of the merger and expected public listing “a significant milestone for our journey to build the leading premium wellness and services platform for pets” and said the funds raised will help “further fuel our growth.”
The value of the deal is also more than Wag raised in total from investors: $324 million, according to the company. Wag currently operates in 4,600 cities across the United States and still plans to expand abroad.
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