It looks like Wag may get another huge injection of cash following a big financing round earlier this year, according to a report by Recode, and also based on what we are hearing.
We had heard a bit ago that Wag was looking to raise around $100 million, which the Recode report also suggests. But it now looks like Softbank is in talks to invest around $300 million in the dog-walking app. Softbank has been aggressively investing large sums of capital in various startups in Silicon Valley and it seems like the company has taken a strong interest in the app after it sought to raise a big round of funding.
Despite the potentially huge funding round, Wag has been in the middle of some intense criticism following a big story from Bloomberg which identified some issues with the company. There are always significant challenges when offloading some activities, like dog-walkers, to an on-demand marketplace, but it looks like that hasn’t been enough to wave off potential interest by investors.
Wag will, of course, face a lot of competition going forward and raising a lot of capital can help it get ahead of that competition. You’ll probably spot a few billboards in very dog-heavy cities (like San Francisco), where the app could find a lucrative business opportunity. But there are also other pet-sitting businesses (which aren’t explicitly just dog-walking apps) like Rover, which actually merged with DogVacay earlier this year.
Wag launched in San Francisco in 2015 but has since launched a big list of cities that include Houston, Los Angeles, Las Vegas, Philadelphia, and Pittsburgh. In dozens of cities, Wag will have to aggressively spend to acquire new customers, whether that’s through digital advertising like Facebook or Google ads or traditional advertising like billboards.
As is normal with all of these conversations, the terms of the deal could change or the talks could even fall apart, which Recode also indicates. Axios also reported that Softbank was interested in the company in its Pro Rata newsletter.
We’ve reached out to Wag comment and will update the story when we hear back. A representative from Softbank declined to comment.
Editor’s Note: The above dog is Sebastian Thrun’s puppy, which, while unrelated to Wag, is a very good dog.