Dog walking startup Wag will go public via a SPAC at a $350M valuation; SoftBank, which invested $300M in 2018, sold its 50% stake back to Wag in 2019 at a loss
1. The interview begins in uneasy silence, as we stare across at each other from our comfy armchairs. Tweets: Paresh Dave / @peard33 : They offer to pay for the cremation costs of your dog in exchange for an NDA. The company is the subject of two class-action lawsuits: one over pay violations and one over its poor vetting of staff. https://www.inputmag.com/... https://twitter.com/... Craig Trudell / @crtrud : The dog days of the SPAC craze? Wag Labs, developer of dog-walking app Wag!, has agreed to go public through a merger with blank-check company $CHWA, @crystalttc reports. https://www.bloomberg.com/...
Context & Ripple Effects
Wag's path to this listing runs through one of the most bruising mega-rounds of the 2018 consumer-app cycle: SoftBank's $300M investment, struck when the company had raised just $40M months earlier, was expected to hand the fund roughly 45% of Wag and push cofounder Josh Viner aside as CEO. By late 2019 the relationship had fully unwound — SoftBank gave up its board seats and sold its stake back to Wag at a loss.
The SPAC merger with blank-check company CHWA therefore prices Wag at $350M — barely above the single check SoftBank wrote in 2018 and well under the private mark that round implied. The listing also arrives with unresolved baggage: reporting tied to the deal notes class-action lawsuits over pay violations and inadequate staff vetting, which now become matters of public-company disclosure.
First-order effects
- Wag gains a public listing through CHWA at a $350M valuation that effectively resets its mark below where SoftBank's 2018 check priced it — while SoftBank, having exited at a loss in 2019, has no exposure to whatever the public market decides Wag is worth.
- The pay-violations and staff-vetting lawsuits move onto a public stage, where quarterly disclosures and shareholder scrutiny raise the cost of the labor practices behind them.
Second-order effects
- CHWA's sponsors and PIPE investors bear the downside risk typical of late-cycle SPACs: a sub-scale target with litigation overhang invites redemptions and dilution before the deal even closes.
- Other gig-economy consumer apps funded in the same 2017–18 window now have a fresh comparable — a peer going public at a fraction of its peak private valuation — which pressures how their own backers mark those positions.
Third-order effects
- If the pattern holds, SPACs become the exit channel of choice for consumer/gig startups whose private marks no longer clear public-market scrutiny, formalizing a writedown of the 2018 mega-round generation rather than a growth story.
- SoftBank's flagship-era bets on capital-intensive, labor-heavy marketplaces face a structural reckoning: the fund's model of buying share via outsized checks is shown to offer little protection when unit economics and labor litigation surface.
The trend: Late-stage consumer apps from the 2018 mega-round era are reaching public markets through SPACs at valuations below their peak private marks, marking a broad repricing of that venture cycle.