SoftBank is giving up on yet another one of its botched investments nearly two years after it paid over $300 million to acquire a substantial stake in a US-based startup. After a series of stumbles, SoftBank is apparently now selling its shares of the dog-walking startup company Wag.
News of the company's intention to sell its shares came from an announcement made by Wag CEO Garret Smallwood to its staff on Monday. Smallwood told staffers that the company will be parting ways with Softbank and that the Japanese investment firm will no longer be represented on its board.
The email sent to staff also mentioned that SoftBank will be selling its stake in the company. Apart from parting ways with SoftBank, which had essentially provided it with seemingly limitless finances for its expansion, Wag is also reportedly planning on massive layoffs to control costs.
According to a filing with the California Employment Development Department on Monday, Wag is apparently shutting down its West Hollywood office. Around 90 people working in the office are expected to lose their jobs this week. The exact number of people the company plans to let go isn't yet clear, but Wag is expected to shut down more of its operations elsewhere as it overhauls its business amid Softbank's exit.
SoftBank has since confirmed the news after it was asked by reporters regarding the matter this week. Wag was once touted by SoftBank as the tech world's next "Big Thing," partly due to its unique on-demand the business model that is similar to the model used by startups such as Uber.
The decision to let go of its investment in Wag is the latest in a line of failed investment by Softbank's $100 billion tech investment fund. Previously failed investments included billions of dollars spent on flashy tech startups such as Uber and Slack, which have both struggled since they went public this year.
Softbank also experienced massive losses with WeWork, after it failed to launch its IPO. The company had to spend billions in order to bail out the WeWork after controversies with its operations and its CEO derailed its planned listing.
Wag had faced similar controversies over its operational practices, including pet safety and customer service. Its former CEO, Hilary Schneider was accused of being negligent in handling the fundamental issues facing the company. This eventually led to Schneider being booted off from her position, with Smallwood being announced as her replacement.
Prior to its decision to sell its shares of Wag, SoftBank reportedly attempted to find other ways to revive the startup. The company reportedly tried to sell Wag to its strategic partners to lessen its exposure to the failing startup.
