The world’s largest VC Fund, SoftBank is selling back its nearly 50% stake in Wag to the embattled dog-walking startup
, which is struggling to turn around its performance.
The startup’s CEO Garrett Smallwood circulated a memo within the company on Monday that laid out job cuts and said the company was "amicably parting ways" with SoftBank. SoftBank is also giving up two seats on the board.
The news about Wag 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.
In a media release, Wag’s Ceo wrote, "Today, we said goodbye to a number of our friends and colleagues as we align our organization with the needs of our business. 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.
Cash rich SoftBank's Vision Fund first invested in the dog-walking startup early last year, pushing up the company's valuation to about $650 million. But the startup has struggled to compete, and in October it was reported that it was seeking to sell itself at a discount. Smallwood became CEO only last month, after CEO Hilary Schneider left to join another firm.
The fund investments have drawn close scrutiny over the past few months after a series of high-profile flops like WeWork's 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 the Vision Fund's more troubled investments.
Japanese owned 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 Thailand Startup
It's unclear how many staffers in total will lose their jobs, but in a filing with the California Employment Development Department on Monday, Wag confirmed it is shuttering its West Hollywood office entirely in a mass layoff. About 90 staffers in this office location will be impacted, the filing said. The company also has offices in the Bay Area and Phoenix.