Hilary Schneider image: Wag

Wag, a Softbank-backed on-demand dog walking startup, has announced a departure of its current CEO, Hilary Schneider, who took on the role just last year, as at the time of a $300 million investment from the Softbank Vision Fund. Schneider is stepping down effective November 29, to be replaced by Garrett Smallwood, who is being promoted from a VP position. Smallwood is joining Wag’s board as part of his transition to the CEO role.

Schneider’s departure represents the third time Wag is going through a CEO change since its founding in 2015. Schneider, who has been Wag’s CEO for just short of two years, replaced co-founder Joshua Viner when she took on the role. Smallwood is now replacing her, as she heads on to a CEO role at photography company Shutterfly. Prior to Wag, Schneider served as CEO at LifeLock, an identity theft protection company acquired by Symantec for $2.3 billion in March 2017.

The CEO change at Wag comes on the heels of reports of the company facing struggles and also exploring a sale. Last month, Recode reported the company had been exploring a sale to potential acquirers, including pet retailer Petco and Rover, its primary competitor. Los Angeles-based Wag, whose primary business entails matching pet owners with on-demand walkers, is said to have struggled to gain market share even after a big investment from Softbank, and has also come under criticism for safety issues in regards to the handling of dogs under the care of its walkers. Atop that, Wag is also said to have had multiple rounds of layoffs, a sign that doesn’t conventionally look positive for a company.

A dog spots a Wag Tag, a scannable (QR enabled) dog tag made by Wag that lets persons identify lost pets and get additional information to help get them retrieved by their owner image: Wag

Wag was one of the early big bets of the Softbank Vision Fund, which as of late has faced criticisms and questions in regards to its usual strategy of pouring higher-than-normal amounts of capital into startups, especially in light of the WeWork debacle.

While companies typically need additional funding, sometimes of very large amounts, to build competitive moats and also get into new markets, raising higher-than-needed amounts of capital can cause troubles as, hypothetically, a company suddenly flushed with obscene amounts of capital may tend towards overspending with little regards to profitability and stability. Such was the case with WeWork, whose valuation plunged from $47 billion [after a Softbank investment] to $8 billion after a later emergency cash infusion from Softbank.

Other companies in Softbank’s portfolio, such as Fair, Brandless, and Oyo are also said to have fiscal struggles of some sorts, with Fair’s signaled by a recent layoff of 40% of its total headcount.