The archive · Consumer Apps · Financial decision · 2015–2019
Wag takes $300M from SoftBank to scale dog walking, then loses share to Rover
Wag took $300M from SoftBank's Vision Fund in 2018 to dominate dog walking; by late 2019 it was laying off staff and losing share to Rover.
Wag
What the business is
An on-demand dog-walking marketplace that matches pet owners with vetted local walkers working as independent contractors, taking a cut of 30- or 60-minute walks and 20-minute check-ins booked through an app.
Starting capital：$300M from SoftBank's Vision Fund, announced in January 2018; CNN cites the Prime Unicorn Index putting Wag's valuation above $600M after the round.
How it started
Wag was launched in 2015, at the height of the on-demand boom, by brothers Joshua and Jonathan Viner with Jason Meltzer, who had run a traditional dog-walking business. Jonathan traced the idea to Josh, who was told he was too busy for a dog and wanted an app that was 'a button on the phone for dogs.' Celebrity backers included Mariah Carey and investor Olivia Munn; by the January 2018 SoftBank deal, Wag operated in 100 US cities.
What happened
In January 2018 Wag announced the $300M investment from SoftBank's Vision Fund and installed veteran CEO Hilary Schneider, previously of LifeLock and Yahoo. The Viner brothers departed about six months later; former employees describe Schneider cutting marketing, a Philippines call center that upset customers, customer service moving to Phoenix, and the Hollywood Hills hub closing, with at least 92 Los Angeles layoffs in 2019 per California filings. Wag's market share fell from nearly 23% in Q1 2018 to about 16% by September 2019 as Rover grew; Second Measure data put Wag sales down nearly 12% year over year in Q2 2019. At least five public incidents of dogs abused or dying in Wag's care surfaced over the previous year, and the global expansion SoftBank's partner had promised never happened — Wag added only 10 US cities.
How it ended up
As of CNN's report on 2019-09-27, Wag was still operating but diminished: layoffs, management churn, market share down to about 16%, declining walk volume and no global expansion — the $300M had not produced the rocket-ship growth SoftBank and Wag's founders expected.
Background
Wag was an on-demand dog-walking marketplace founded in Los Angeles in 2015 by brothers Joshua and Jonathan Viner with Jason Meltzer, following Uber's playbook: pet owners summon a vetted local walker, paid through the app, who works as an independent contractor. The founders' bet was that a 'button on the phone for dogs' could apply on-demand economics to pet care.
In January 2018 Wag announced a $300M investment from SoftBank's Vision Fund, and veteran executive Hilary Schneider joined as CEO. The round pushed Wag's valuation past $600M, SoftBank's Jeffrey Housenbold called Wag the clear leader in the rapidly growing global market for pet care services, and the brothers left about six months later.
Then things got messy. Former employees describe leadership disengaged from growth metrics, marketing cut, customer service shifted from Los Angeles through a Philippines call center to Phoenix, and the Hollywood Hills hub closed — at least 92 people were laid off in Los Angeles in 2019 per state filings. Second Measure data showed Wag's market share falling from nearly 23% in Q1 2018 to about 16% by September 2019 while rival Rover grew, with sales down nearly 12% year over year in Q2 2019.
At least five public incidents of dogs being abused or dying in Wag's care surfaced in the year before the report, and the anticipated global expansion never happened — Wag added just 10 US cities. CNN's account, based on interviews with 17 former employees, drew 200 points and 272 comments on Hacker News on 2019-09-27, and the case became part of the wider reckoning over SoftBank's strategy of buying growth with giant checks.
What has to be true
- The reversal was documented with numbers: Wag's market share fell from nearly 23% in Q1 2018 to about 16% by September 2019 while Rover grew, and sales were down nearly 12% year over year in Q2 2019.
- The money did not buy operating maturity: HR arrived only with the deal, customer service could not handle volume, and at least 92 Los Angeles workers were laid off in 2019.
- Trust is the product in pet care: with at least five public incidents of dogs hurt or killed in Wag's care in a year, each safety failure undercut the marketplace's core promise to owners.
- The premise of the round, global expansion, never materialized: SoftBank's partner had called Wag the global pet-care leader, yet it added only 10 US cities after the investment.
What can be applied
Capital cannot replace operations in a trust business: a marketplace handling people's pets scales incidents as fast as walks, and a giant check without coherent metrics accelerates the mess.
Aftermath
As of 2019-09-27, Wag was still live but shrinking: roughly 16% market share, at least 92 layoffs in Los Angeles that year, declining volume and no global launch, with the company telling CNN it was working to 'grow thoughtfully.' The CNN article records nothing after that date, so whether Wag later recovered, kept shrinking or exited is outside the scope of this case.
Sources
- Dog-walking startup Wag raised $300 million to unleash growth. Then things got messy
- Dog-walking startup Wag raised $300M, then things got messy
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