Do you remember Wag? the Dog walking app made waves in 2018 when it raised $300 million from SoftBank’s Vision Fund.
Compete with rivals rover, Wag’s ministry has slipped our minds in the years since his mega deal. Today, thanks to a, Wag is back in the news recently announced SPAC deal that will take the company public.
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That means we get an insight into the machine.
Basically, Wag’s findings describe a company that took a beating during the pandemic when people stayed at home, meaning they needed less outside dog sitting than before. But with results rising, Wag expects the recovery to continue, thanks to staff returning to the office this year. Office yield dynamics make Wag’s forward-looking statements very interesting.
Let’s go through the terms of the SPAC deal, and then look at Wag’s historical results and his expectations for the future. Finally, the return-to-office issue affects a variety of businesses beyond Wag. From Uber to DoorDash and beyond, a return to more old-fashioned working conditions would revitalize our economy.
The Wag Deal
Wag merges with CHW Acquisition Corporation. Specifically, the deal calls Wag a “vertically integrated technology platform.” The press release also states that as part of the deal from current Wag! and CHW investors,” including “Battery Ventures, ACME Capital, General Catalyst, and Tenaya Capital.” In short, this is why this deal is important to us; it’s a venture-backed company that’s still raising venture capital.
In more boring terms, “The transaction values the combined company at a pro forma enterprise and equity value of approximately $350 million,” which isn’t much. Especially given that private capital in Wag is roughly the same up to this point. The deal, assuming “no redemptions from CHW shareholders, [will] provide approximately $175 million in gross cash revenues to the combined company.”
Shares in CHW Acquisition Corporation trended lower last week but recovered today to $9.82 per share, a slight discount to the usual SPAC price of $10 per share that we tend to see pre-combining. Still, the market hasn’t thrown its arms at the concept of the deal since its announcement. Why? Partly because wags point numbers in the right direction.
A Pandemic Recovery
To understand Wag’s return to growth, we need to discuss its declines. In short, when the pandemic struck, demand for Wag’s services — dog walking, pet grooming, etc. — fell off a cliff.
Observe:
