SOFTBANK Group Corp's Vision Fund is selling back its nearly 50 per cent stake in Wag Labs Inc as the dog-walking startup cuts staff.
Wag will regain control of SoftBank's two board seats as part of the agreement, according to a memo Wag sent to staff on Monday. The company didn't disclose terms of the deal or the number of jobs set to be eliminated.
A spokeswoman for the Vision Fund confirmed the stock sale but declined to comment further. A spokesman for Wag declined to comment.
The Vision Fund had invested US$300 million in the business early last year before a reckoning came for Uber Technologies Inc, WeWork and other unprofitable companies backed by SoftBank. Wag's chief executive officer left last month and was replaced by the company's 29-year-old vice president of product and partnerships, Garrett Smallwood.
Even after a cash infusion and aggressive spending, Wag struggled to compete with Rover Inc. Wag's position worsened once it cut back on promotions for new customers. Wag had been seeking to sell itself as recently as October, in a deal that was expected to value the business at less than the amount SoftBank paid for its stake, people familiar with the situation said. Wag had about US$100 million in cash earlier this year, one of the people said. BLOOMBERG