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A SoftBank-led group could buy as much as 45 percent of Wag, the dog-walking app that’s being loaded with cash

Also, we reveal that it was Battery Ventures that led Wag’s undisclosed fundraising round last April.

A man and woman holding hands walk a small dog on a leash Europa Press/Europa Press via Getty Images

SoftBank could acquire as much as 45 percent of Wag, the dog-walking app startup that is in talks to accept $300 million in funding despite originally only seeking one third as much money.

Recode reported last month that Wag was pitching investors on a $100 million round of financing. But then, amid fundraising troubles, the Japanese giant SoftBank — which is on a funding rampage in the U.S. tech sector — and Wag entered talks to triple that.

The deal has not yet closed and could still fall apart. But the mere offer has been a hot topic in Silicon Valley, because it vividly shows how SoftBank has influenced fundraising outcomes in tech.

Now we’ve learned something even more unusual: The deal could give SoftBank and co-investors around 45 percent of the company, according to multiple sources familiar with the deal. The transaction values the dog-walking company at around $650 million when you include the $300 million in cash.

Typically, a venture firm leading a round might acquire between 15 percent and 20 percent of a company. It is quite rare to see this type of ownership percentage in a venture-backed company, especially from a single investment round. And it’s another sign of how SoftBank — which is investing a mammoth $100 billion fund — is changing the rules here in Silicon Valley.

Wag serves as a marketplace for dog owners and dog walkers, but has encountered fierce competition from Rover, another venture-backed company that offers a similar service. The onerous terms of the deal suggest Wag does not have significant leverage in fundraising negotiations, perhaps a sign of troubled finances at the company.

SoftBank and Wag declined to comment.

SoftBank is the lead investor behind the $300 million, though other smaller investors could join the round. Wag had already received a $100 million investment offer from a top venture capital firm before SoftBank arrived, a person familiar with the conversations told Recode last December.

The company was valued at around $200 million just last April, according to PitchBook, meaning this would be the company’s second round of financing in just a year. Previous investors include Sherpa Capital and General Catalyst.

Recode has also learned the identity of the venture firm that led Wag’s April round of financing, which the company did not disclose. That $40 million round was led by Battery Ventures, according to two people with knowledge of the matter.

Battery, which does not list Wag under its “List of All Companies” in its portfolio on its website, declined to comment.

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