SoftBank Group Corp.'s SoftBank Vision Fund LP agreed to sell its nearly 50% stake in Wag Labs Inc. back to the U.S. startup, The Wall Street Journal reported, citing sources.
In an internal memo, Wag Labs CEO Garrett Smallwood said the company is "amicably parting ways with SoftBank," and the Japanese conglomerate will no longer have board representation at Wag Labs.
SoftBank decided to take a writedown on its investment and cut losses after Wag Labs' discussions for a potential sale did not push forward, according to sources. The price of the stake sale remains private but is expected to be well below the approximate US$650 million valuation at which SoftBank invested US$300 million early in 2018.
Wag Labs laid off a significant amount of its workforce on Dec. 9, the report noted, citing an internal memo and one source. The move comes after Wag Labs laid off several dozen employees early this year.
In October, SoftBank Vision Fund also reportedly began considering a write-down of at least US$5 billion due to a drop in value of some of its investments, such as in WeWork Cos. Inc. parent WE Co. and Uber Technologies Inc.