Dec 10, 2019

SoftBank bails on $300 million investment in dog-sitting company Wag

SoftBank Group CEO Masayoshi Son on Nov. 6. Photo: Kazuhiro Nogi/AFP via Getty Images

SoftBank Vision Fund is bailing on Wag, the dog-walking and dog-sitting company in which it invested $300 million in early 2018.

What's happening: SVF will sell its shares back to the company for an undisclosed amount, and give up its board seat.

The big picture: This is just the latest black eye for SVF, but isn't quite as dark when viewed in the context of traditional VC portfolio management. The Wag investment represents 0.3% of SVF's committed capital.

  • Were we talking about a $100 million venture fund, it would be the equivalent of bailing on a $300,000 investment (which happens all the time).
  • SVF is anything but "traditional" and arguably is as much a private equity fund as a venture fund, but basic portfolio management rules can still apply.

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Illustration: Eniola Odetunde/Axios

SoftBank Vision Fund has walked away from investing in several startups, months after submitting term sheets worth hundreds of millions of dollars and promising that closing delays were only temporary, Axios has learned.

Why it matters: This is highly unusual behavior, even for the idiosyncratic SoftBank, and threatens its ability to invest in highly sought-after companies. SoftBank, which has invested record amounts into startups over the past few years, confirmed that it has "regret" over these situations.

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The venture capital party is not over

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"The venture capital party is over" was the gist of countless mainstream and social media predictions in October, following WeWork's IPO collapse and SoftBank's difficulties in raising over $100 billion for its second Vision Fund.

Why it matters: They were wrong.

Go deeperArrowDec 17, 2019

Tom Cotton says WeWork debacle is driving Americans toward socialism

WeWork founder Adam Neumann. Photo: Jackal Pan/Visual China Group via Getty Images

Sen. Tom Cotton (R-Ark.) last week told CNBC that the WeWork debacle is driving some Americans toward socialism.

The state of play: Cotton's argument is an unintentional critique of American capitalism, at least as codified by legislators like Cotton.

Go deeperArrowDec 20, 2019