SoftBank Parts Ways with Dog-Walking Startup

Category: Business


Unlocking Word Meanings

Read the following words/expressions found in today’s article.

  1. mishap / ˈmɪs hæp / (n) – an unfortunate or unlucky accident or event

    The concert passed by without any mishaps.

  2. on-demand / ɒn dɪˈmænd / (adj) – available when needed or requested

    I subscribed to a mobile app that lets me watch movies and TV series on-demand.

  3. up-and-coming / ˈʌp ənˈkʌm ɪŋ / (adj) – likely to become successful, important, or famous in the future

    My father invested in an up-and-coming company that promises to be international in five years.

  4. scrutinize / ˈskrut nˌaɪz / (v) – to examine something or someone carefully

    The lawyer scrutinized the contract before asking his client to sign it.

  5. underperform / ˌʌn dər pərˈfɔrm / (v) – to perform less than expected

    Industrial stocks underperformed in the world market and caused a lot of companies to lose profit.


Read the text below.

Japanese company SoftBank has decided to give up its stake in Wag Labs, Inc., a US-based dog-walking startup.

In early 2018, SoftBank invested $300 million in Wag!, an app that matches dog owners with available dog walkers in the area. However, after a series of mishaps, the company decided to part ways with the startup.

Sources speculate that SoftBank will be selling its shares in Wag for much lower than $650 million, the valuation of Wag in 2018. Wag’s CEO Garrett Smallwood also announced that SoftBank will no longer have seats in Wag’s Board of Directors.

Wag’s operation uses an on-demand business model similar to that of Uber, a ride-hailing company. The startup was envisioned as an up-and-coming technology-based business, but some investors had greatly scrutinized SoftBank’s decision to invest such a large amount in a small startup.

Even with SoftBank’s investment, though, Wag struggled to keep up with its competitor, Rover Inc. Wag also underperformed financially, endured a series of layoffs, and even lost dogs. Eventually, the startup changed CEOs, but the new CEO disagreed with some of the startup’s strategies. Wag was also discussing a possible sale with two pet companies, but the discussions did not get far.

After SoftBank’s pullout, Wag decided to save its business by cutting jobs. Wag confirmed that it will be closing down one out of its three offices, in which around 90 employees will be affected. Smallwood claims that the layoffs are painful but necessary to secure a bright future for the company.

Viewpoint Discussion

Enjoy a discussion with your tutor.

Discussion A

• Do you think it is a good move for SoftBank to part ways with Wag? Why or why not?
• Do you think Wag will survive without SoftBank? Why or why not?

Discussion B

• If you had an on-demand business, what kind of product or service would you create? Why?
• How will you attract investors to your company? Discuss.