Dog-Walking Startup 'Wag' Files For Bankruptcy (sfgate.com)
- Reference: 0178497516
- News link: https://slashdot.org/story/25/07/28/2359237/dog-walking-startup-wag-files-for-bankruptcy
- Source link: https://www.sfgate.com/tech/article/sf-tech-company-wag-files-for-bankruptcy-20790355.php
> During the 2010s' boom in on-demand services such as Uber and DoorDash, Wag staked a claim to the market for dog walking. It became a buzzy, high-flying company, [1]at one point gaining a valuation of around $650 million , and grew to offer a whole range of tech products for pet care. But as the years passed, [2]struggles mounted and profits remained elusive. On July 21, Wag [3]filed (PDF) for bankruptcy. To stay alive, the San Francisco-headquartered company is now using bankruptcy court to restructure in what's known as a Chapter 11 process. Its lines of business -- including gig-work dog walking and sitting, pet insurance, and the veterinary tool "Furscription" -- will remain open, according to a [4]news release . If a judge approves Wag's restructuring plan, it will take the company off the public markets and into the private hands of a company called Retriever.
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> On the same day of the bankruptcy filing, Wag's chief financial officer, Alec Davidian, submitted [5]a document (PDF) supporting and explaining the move. He wrote that Wag's "monthly revenues declined rapidly after March 2020 as a result of the COVID-19 pandemic" and pointed to $69.5 million in losses from 2022 through 2024. The losses weren't Wag's only problem. The company had taken out debt in 2022 when it went public, and in that loan agreement, it had set a minimum level of cash Wag would need to have on hand at all times. This year, Wag dropped below that amount, Davidian wrote. Wag also failed to find a third-party deal to get more money, the CFO noted, and its debt obligations are set to mature in August, meaning the company was "facing a dire liquidity crisis." So, Wag opted for the bankruptcy proceeding, in which it plans to eliminate the 2022 debt, which is currently held by Retriever.
"Through the Restructuring," Davidian wrote, "[Wag] will emerge from these Chapter 11 Cases a stronger company, with a more sustainable capital structure that is better aligned with [Wag's] present and future operating prospects."
[1] https://www.sfgate.com/tech/article/sf-tech-company-wag-files-for-bankruptcy-20790355.php
[2] https://news.slashdot.org/story/19/09/30/1831245/dog-walking-startup-wag-raised-300-million-to-unleash-growth-then-things-got-messy
[3] https://storage.courtlistener.com/recap/gov.uscourts.deb.197830/gov.uscourts.deb.197830.1.0.pdf
[4] https://investors.wag.co/news-releases/news-release-details/wag-group-co-announces-recapitalization-transaction-retriever
[5] https://storage.courtlistener.com/recap/gov.uscourts.deb.197830/gov.uscourts.deb.197830.2.0.pdf
Dog puns (Score:2)
"Wag opted for the bankruptcy proceeding, in which it plans to eliminate the 2022 debt, which is currently held by Retriever."
Re: (Score:3)
Golden!
What value added? (Score:5, Insightful)
I mean - walking dogs. Takes person to actually walk them. How much value is any of the other overhead really adding. Just another bullshit business to pocket half the profits and underpay the actual worker.
Re:What value added? (Score:5, Funny)
Seriously. They should have called it Bitch.
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But it's so hard to trust your retiree living next door or the high schooler down the street (both of which could use some extra cash). I'd much rather go onto the internet and hire a complete stranger. This way I never have to engage in any sort of meaningful relationships. It's an introverts world these days.
Re: (Score:2)
> Just another bullshit business to pocket half the profits and underpay the actual worker
Exactly this is the problem. Walk the dog for the neighbors once through Wag, then make your own (cheaper) deal (where the walker keeps more of the payment and the dog owner pays less) with the dog owner without Wag for all future walks.
How did Wag honestly think they would stay in business?
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The problem with making a deal with an individual is that sometimes that individual won't be available, will forget, or just won't want to bother. I know of several local small businesses that walk dogs, but they all have more than one person available for each shift. There's still the problem that each person can only walk one dog at a time (or maybe two dogs), so your dog might get walked at 11 a.m. one day and 3 p.m. the next day.
I've never heard of Wag before, but I've seen TV commercials for dog walk
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> Walk the dog for the neighbors once through Wag, then make your own (cheaper) deal
If you only walk one dog you're not doing much business and are probably not even remotely interested in negotiating deals.
> How did Wag honestly think they would stay in business?
Why wouldn't they? They were perfectly profitable pre-COVID. What has changed isn't the business model, it's the underlying way people treat their pets. Why pay someone to walk the dog now when I'm home. Incidentally since I'm home I can walk the neighbours dog too. Could you predict that we would experience a global pandemic that would result in people staying home from work, ending up
Re: (Score:2)
The insurance part would be the value-added layer. My girlfriend started a dog-caring business for an extra allowance. When you look closely at the subject there are a few complicated scenarios that you need to consider and most of them include the dog biting you or someone else. And you also have medical emergencies that the dog-walker may have to deal with, including having to put the dog down and getting sued by the owner for doing so. Having a rulebook to go by and insurance coverage for all these crazy
Re:What value added? (Score:5, Interesting)
I watch dogs (primarily overnight--most for 3-7 days but some 1 day and some >7d) via Rover. I make around $1500/month (pre-1099) and after their ~20% cut (of which most people give back to me in tips).
I WFH so the largely passive income is nice. I wouldn't have found as many people w/o a platform to do the heavy lifting for me in finding new dogs.
I am not advocating that we need to have these sorts of things in the market, but it does make for nice extra cash. YMMV.
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You could say that about literally any system that brings together any parties. Why do you need Uber? Just phone for a ride. Why do you need Doordash? Just call a restaurant. Websites are dime a dozen, why bother with Amazon, sell your own product. etc. etc.
Much of our modern commerce is created based on the convenience of instantly connecting a need to a service provider. That's all these guys did, and they are one of many such companies operating in many industries in the same way.
They replace Google and
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I've always hated TV-remotes. If you are too lazy to get your butt off the couch and turn the channel selector on your Sylvania "bright-ring" B/W 14" unit , then mebby you should return to your RCA-Victor radio. Just replace the burned-out tubes before turning it on.
Dial HURRY-UP (Score:2)
They also walk dogs.
As MJ said... (Score:2)
Another one bites the dust!
(woof)
General Services (Score:3)
There's a short story by Robert Heinlein called [1]We Also Walk Dogs [wikipedia.org] . The center of the story is a corporation called General Services, which started as a dog-walking service and then expanded to do anything anyone wants, for a fee (as long as it's legal, of course). The story implies that a lot of their income derives from rich people who have problems but are ballocks at solutions: due to a lack of imagination and a disinclination to solve their own problems. The top General Services agents have imagination, a vast knowledge of the available solutions, and an army of specialists available for hire.
And their slogan remains, "We Also Walk Dogs".
Would that work in the real world? I have no idea. Maybe there already are such organizations. A lot of corporations say they're selling solutions, but it often seems they cause more problems than they solve.
[1] https://en.wikipedia.org/wiki/%E2%80%94We_Also_Walk_Dogs
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> And their slogan remains, "We Also Walk Dogs". Would that work in the real world?
Yes, it did work in the real world. Except the slogan is "We Also Sell Books".
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While there is certainly a parallel in the arcs of their growth, Amazon and General Services have fundamentally different business models. Amazon has become "we sell anything" while General Services was "we'll perform any (legal) service".
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> Would that work in the real world? [snip] Maybe there already are such organizations.
It does work in the real world, and there are such organisations both as stand-alones and as divisions of premium airlines/hotels/etc. The industry term is "concierge service" - sort of an outsourced personal assistant to HNWs, and is not dissimilar to that which RAH describes.
> I have no idea.
FTFY
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That's essentially what services like Mechanical Turk and Task Rabbit provide for upper middle class people. People who are legitimately wealthy have dedicated fixers and consiglieres they employ full time or keep on retainer.
Meanwhile in the 40k universe (Score:2)
Orc-walking startup Waaagh files for bankruptcy.
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Yes, I remember them well. They had an office next to RIPLEY, the alien-walking service. I believe RIPLEY even provided Teflon walking-suits and "head-cones" for the creatures.
Will we ever get a walking service for snowflake wokers that includes rose-colored glasses, wife-beater Ts and genuine Palestinian manufactured sandals ?
Everything old is new again (Score:2)
The /. synopsis reads like every original dot com bubble bankruptcy (man I miss fuckedcompany dot com, great insight form the people who were there) statement.
"We grew too large too fast, but this restructuring will allow us to emerge stronger than ever!"
Less than a year later they were just another footnote in the every-growing pile of stupid/failed dot com companies.
tried using them once... (Score:2)
Setup an appointment, was away for the evening. They cancel on us..
Never used it again and told everyone they cancel on you for something you need to depend on.
Oh holy shit (Score:3)
Oh holy shit. Who the fuck thought this was a good idea? Venture capitalists have to be some of the stupidest people in the history of humanity. But I guess they only have to score once. Jesus Christ.
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Somebody who works more hours than they want to, for example somebody who has to work 2 jobs on certain days. An additional solution to the problem is to move the company to a city that has a significantly lower cost of living.
Re: Oh holy shit (Score:2)
Move the company? S.F. probably has a huge customer base. Lots of people who bought covid puppies but don't have the time for them.
Move to my neighborhood? Doubtful that would be a wise decision. My neighbors have more chickens than my dog knows what to do with.
Re: Oh holy shit (Score:5, Insightful)
When I use Uber, I don't care who the driver is. I just need to get from A to B.
If I pay someone to walk my dog, it needs to be the same person each time, because dogs don't trust strangers.
So I have an obvious financial incentive to disintermediate the relationship and make a deal directly with the walker, cutting Wag out.
Re: Oh holy shit (Score:1)
Exactly. Taxi is a commodity product. Dog walker or nanny is not. Once the dog walker is found, there is no need to go through the middleman company. There is no recurring business there.
Re: Oh holy shit (Score:1)
Exactly. Taxi is a commodity product. Dog walker or nanny is not. Once the dog walker is found, there is no need to go through the middleman company.
Because people work 12 hours a day (Score:4, Informative)
6 days a week. My kid is using these services sometimes. you work literally 6, 12 hour shifts in a week while you're trying to build your career. In exchange for that you might get a middle class wage 10 or 15 years down the line.
At some point your dog needs to get taken out and if there's nobody around to do it your options are to come home to a pile of poop or pay somebody to do it.
In the old days you would have a neighborhood kid do it but our birth rate is something like 1.6 and a lot of those kids are doing cram schools now.
So you take some of the money you got from those six 12-hour shifts and you pay somebody to take your dog out to poop.
It's not a good system, it's a symptom of late stage capitalism. It's the same reason doordash is so popular. At the end of a ludicrously long shift you're too exhausted to do anything but order in and the only one that delivers anymore is pizza unless you pay for doordash.
Again late stage capitalism.
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I agree with you in that having to work 12x6 is fucked. However, if you are in that shitty position, you should not own a dog. Leaving a dog home alone that much with no companionship is just not good for them, even if you can afford a walker. Someone in that position should do the responsible thing, both for their own finances and ethically, and just not take on pet ownership.
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> Oh holy shit. Who the fuck thought this was a good idea? Venture capitalists have to be some of the stupidest people in the history of humanity. But I guess they only have to score once. Jesus Christ.
Masayoshi Son, the CEO of Softbank, thought it was a great idea and invested about $300 million in it 7 years ago. At some point he sold his shares back and left, but I'm sure they were sold at a big loss. Most of Son's VC investments have been terrible and a lot are stunning in that exactly as you post, it makes you wonder why anybody would invest in that kind of company. A very small number of his investments were massively successful, probably just by random luck. A few are OK enough. Most are
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> Oh holy shit. Who the fuck thought this was a good idea?
"From the people that brought you DrKoop.com, comes a new service for your dog..."
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My understanding is venture capitalists expect about 1 in 20 of their investments to be successful. The rest, I guess, are tax write-offs. And they may be stupid, but they have to be stupid rich just to get into the game.
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> Oh holy shit. Who the fuck thought this was a good idea?
It legitimately was a good idea. Objectively so, it was a perfectly profitable business. A lot of idiots keep pets as a status symbol, or do so without any thought as to the effort which goes into maintaining a healthy pet relationship. Paid dog walkers, pet sitters, and other animal services are a thing, as are friendly neighbours (I walked our neighbour's dog yesterday). It's an industry that predates an online booking system and will continue to exist beyond it.
What changed was COVID forced people to be