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How SoftBank’s Interest Cost One Startup Other Potential Investors

Late last year Wag, an app that helps people find dog walkers, was in talks to raise $100 million. SoftBank took a look but would only invest if the round was $300 million. Other investors, including NEA and Kleiner Perkins, felt that was too much money for the startup to raise and dropped out, say people involved in the deal.

SoftBank still hasn’t committed to an investment. If it eventually decides to pass, Wag will have to start looking for funding again. Even worse, SoftBank might end up investing in a rival, according to a person familiar with the situation.

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Another concern was that Wag had been raising money too often. Since launching in 2014, Wag reportedly raised about $50 million from VC investors, including Sherpa Capital and General Catalyst. Investors also questioned whether there was demand for professional dog walkers outside of big cities in the U.S. Both Rover and Wag offer their services nationwide, according to their websites.

Wag and Rover representatives declined to comment.

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