SoftBank appears to have given up on dog-walking startup Wag even after investing $300 million in it almost two years ago due to missteps at the company.
Newly appointed Wag chief executive officer (CEO) Garrett Smallwood informed employees through email on Monday the it was "amicably parting ways with SoftBank" and will be selling its $300 million stake back to the company.
Smallwood wrote that Softbank will no longer have a representative on Wag's board. The news was confirmed by a SoftBank spokesperson.
This development indicates the dramatic fall of Wag as a startup perceived to be the next trend in technology as it is powered by an on-demand business model similar to companies like Uber and was backed by SoftBank financially. The company is also currently implementing job cuts.
The startup's downfall may be attributed to its inability to keep up with its competition. In late September, CNN Business published an investigation which revealed that Wag underwent multiple rounds of layoffs, endured management changes, and closed down its customer service hub in the Hollywood Hills.
The company has also failed to deliver to its highly anticipated global expansion.
According to some former employees at the startup, the then-CEO Hilary Schneider did not have a firm grip on fundamental issues facing the business, including growth, pet safety and customer service.
At the end of November, the Wag announced on Tuesday that Schneider will be leaving to pursue "a new opportunity" less than two years after taking the firm’s helm. On the same day, a press release revealed that Schneider has been hired as the new CEO and president of online retailer Shutterfly.
Prior to its decision to sell its stake at the company, SoftBank considered various options for Wag, including its sale to a strategic investor and reported sales talks with Petco.
