The Story Behind Haystack’s Investment In Wag

Back in early 2015, while I was a venture partner with Bullpen, the guys there remarked about one of their portfolio founders on a continuous pivot with his company and that while it seemed crazy, they admired the team’s craftiness in hunting for the next thing. Ultimately, that company ended, and the founders wanted to start a new company right after — Wag!. There wasn’t much time to reflect in between. There was no Medium post about the shutdown. The new idea wasn’t remotely related to the previous ideas. Bullpen was going to back the founders again, and I agreed to take the meeting after getting a few pings from my friend Jonathon at Ludlow.

I’m glad I did. In the meeting, Josh and I talked about how they started a dog walking service via mobile app. After investing in Instacart, DoorDash, and Managed By Q, I had studied the on-demand market and realized Wag was on to something subtle but big — in various cities, depending on the local laws, “dog walkers” could legally walk five, or even up to 10 or 12 dogs at a time. Wag charged about $25 per dog per walk, and each walk took about 30 minutes, so a Wag walker could make just as much in a morning as a Uber or Lyft driver could make in a day. And, for those who prefer man’s best friend to humans, this was a dream job.

I know the pet industry in the U.S. is huge and growing, but it was this particular economic advantage which motivated me to invest. I committed early to the deal and then aggressively shared the deal with a bunch of friends who also invested — and they will hopefully remember my generous email!!! — and the Wag team was off to the races, eventually scoring a lead investment from friends at Freestyle (Josh), followed by a Series A led by Niko at General Catalyst. In each round, I was surprised the deal got done, but thankfully, there were VCs who were willing to invest in a wacky idea.

Years later, it has become a huge, fast-growing business. Dog walkers are engaged daily, there is system for dog owners to monitor and keep up to date on their pets while they’re away or at work, and the current startups in the space — namely Rover and DogVacay — began as new way to kennel a dog but lacked the frequency of the Wag model. Eventually, Rover and DogVacay merged, raised $65M in growth capital from a top tier VC in Spark, and now both entities are competing in this dynamic space.

It will be interesting to see who wins. Masa-san and his team at Softbank think so, too — this week it was finally announced that the Softbank Vision Fund has invested $300M into Wag. Wow! If you’re a dog owner and use the Wag app, there’s a feature that will tell you when your dog poops via a push notification. I need the VC-equivalent of that feature right now 😉

I’m looking back at the deck from February 2015 it is amazing to see it today. It is pretty detailed, but also crazy to think it could work and turn into a real business. I continue to be surprised by this company, and it reinforces to me to lengths to which entrepreneurs have to dream and work to make their pitch decks come to life and scale. It will be fun to watch where Wag zigs or zags next — around the country, Wag walkers have earned the trust of customers to come in their homes daily and help walk their precious cargo. Perhaps we will see Wag walkers helping their customers more in the house; perhaps we will see Wag pet food and toys; or perhaps we will see petcare and other services layered in. I will be watching this fight with a keen eye, indeed.