Billionaire Masayoshi Son caused complete disbelief: Poured $ 300 million into a dog-walking startup ‘oh my gosh’ and now the company is on the edge of bankruptcy, pricing less than the Softbank investment.

Tram Ho

Wag's dog walking app has become a symbol of Softbank's investments in tech startups. The "useless" business with this completely unproven business is getting into a series of trouble in operation, disturbance in the leadership team, uncertain future. Specifically, yesterday, the current CEO announced that he would leave the company leaving the mess going on here.

Hilary Shceneider, the CEO who is about to leave the company, joined Wag Labs early last year at the same time Sofbank invested $ 300 million here. She will leave and become the CEO of Shutterfly – a photo printing company that was sold to a private fund in June. The partner at Softbank, who led the group to its Wag investment, is Jeff Housenbold. have run Shutterfly for many years.

Tỷ phú Masayoshi Son gây mất niềm tin hoàn toàn: Rót 300 triệu USD vào startup dắt chó đi dạo trời ơi đất hỡi và giờ công ty này trên bờ vực phá sản, định giá rẻ hơn cả số tiền Softbank đầu tư - Ảnh 1.

Schneider's position at Wag will be replaced by Garrett Smallwood – VP of products and partners of the company. Smallwood dropped out of college in 2010 and then started a loan business for people who couldn't pay their health care bills. Wag bought his company in 2017. Since then, Smallwood has been a part of Wag's leadership team.

In an email to say goodbye to employees, Schneider said that Wag currently has more than 150,000 dog walkers. Wag seems to be considering selling himself for even less than the $ 300 million that Softbank invests. Smallwood emailed employees on Thursday and talked about the company's partnership with Petco Animal Supplies – a potential buyer.

Tỷ phú Masayoshi Son gây mất niềm tin hoàn toàn: Rót 300 triệu USD vào startup dắt chó đi dạo trời ơi đất hỡi và giờ công ty này trên bờ vực phá sản, định giá rẻ hơn cả số tiền Softbank đầu tư - Ảnh 2.

Inspired by Uber, right from its inception Wag declared that it wanted to revolutionize an industry that previously relied only on word of mouth or spotlight ads. Wag charges $ 20 for a half-hour dog walk in New York, Chicago, Austin and Seattle. The money will be shared between Wag and the dog walking service provider at a ratio of 40/60. In the heyday, this startup attracted both celebrities to use services such as singer Mariah Carey and actress Olivia Munn, operating in more than 100 cities across the United States.

At that time, Softbank was very keen to invest in the pet care space, so in 2018 after unsuccessful negotiations with a startup providing services similar to Wag, Masayoshi Son's Softbank decided to "come down." money "and invest $ 300 million in Wag.

Immediately after the agreement was completed, Softbank's management partners were mobilized to join Wag's board to ensure the business went smoothly. However, Masayoshi Son was not so lucky.

After more than a year of pouring money to invest, problems in Wag gradually surfaced. From firing employees, changing leadership to closing service centers. They were also heavily criticized when some users complained that the company lost their dogs.

As a result, according to Prime Unicorn Index data, after the agreement with SoftBank, Wag's value soared to more than $ 600 million. Not only that, Wag also won a larger market share than Rover – a major competitor. In the first quarter of 2018, they held nearly 23% of the market share. Now, however, their market share has dropped to just 16% while their rival Rover has risen.

Wag's revenue dropped 12% in the second quarter of this year while its competitor saw sales increase 24%. Not to mention, Rover's revenue is currently 5 times larger than Wag's. A source close to that said Wag currently only holds $ 100 million in cash while annual net revenue is only $ 50 million. Wag is currently facing financial difficulties.

Overall to this point, there is not much hope for Wag, the future of the company is completely uncertain. This is another warning to the "money-burning" strategy, in exchange for the growth and rapid market share that some startups are using.

As for Masayoshi Son, once again one has to question the investments he is making with the Vision Fund worth $ 100 billion. Strategy "risky" of this billionaire is likely to make him "empty-handed" in the future.

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Source : Trí Thức Trẻ/Tổng hợp