SoftBank Group Corp.’s Vision Fund has agreed to invest $300 million in Wag Labs Inc., a startup that uses a smartphone app to connect dog walkers with dog owners.
Hilary Schneider, former chief executive of identity theft protection company LifeLock, will replace Joshua Viner as Wag’s CEO as part of the deal, the Los Angeles-based company said in a statement Tuesday. The two-year old company had originally sought $100 million from venture capitalists, Bloomberg first reported in October.
SoftBank’s fund, which has been eager to invest in the pet-care space, pushed Wag to accept $300 million to finance a global expansion and fend of competitors, a person close to the deal said. Rover, a Seattle-based startup that also connects dog owners with walkers, had also been in talks with SoftBank before it decided to back Wag, said the person, who asked not to be identified because the discussions were private. A representative for Rover declined to comment on any discussions.
As part of the investment, SoftBank’s managing partner Jeffrey Housenbold and senior investor Ted Fike will join Wag’s board. Housenbold will serve as Wag’s chairman, Wag said in the statement. In December, Shervin Pishevar, a venture investor who had been acting as Wag’s chairman, resigned following a series of sexual misconduct allegations.
Schneider, the new CEO, is expected to help Wag improve its brand image and customer trust, said the person. Wag has faced criticism after some users have complained that the company loses dogs. In October, a customer in Long Island said Wag tried to bribe her after a dog walker lost her Beagle-Labrador mix. While Wag denied her claim, the dispute spooked some investors who had considered backing the startup.
Inspired by Uber, Wag says it wants to revolutionize an industry that has long relied on word-of-mouth referrals and lamp-post advertisements. Wag charges about $20 for a half-hour dog walk in New York, Chicago, Austin and Seattle. The startup takes up to 40 percent commission to connect dog owners with on-demand walkers.
SoftBank and its Vision Fund, with a $100 billion target, has taken stakes in scores of companies over the past year, including Uber Technologies Inc., Slack Technologies Inc., WeWork Cos. and Chinese ride-hailing company Didi Chuxing. The fund made about 100 investments last year with a total value of $36 billion, according to research firm Preqin.