Two Pet Companies Went Public via SPAC. Both Are Cautionary Tales.

BARK went public at a $1.6 billion valuation in June 2021. The stock hit $19.54 that December. Today it trades around $0.89, with a market cap of roughly $152 million. Wag completed its SPAC merger in August 2022, watched 98% of shareholders redeem before the deal even closed, and filed Chapter 11 bankruptcy three years later.

These aren't outliers. They're the only two pet companies that attempted the SPAC path during the 2020-2021 boom. Both are now cautionary tales for founders thinking about public market exits.

The story isn't that SPACs are bad. The story is that public markets expose what private markets can overlook. Neither company had the unit economics to survive that scrutiny.

The Pandemic SPAC Boom Hit Pet

Pet SPAC activity followed the same pattern as the broader market. SPACs offered a faster path to public markets than traditional IPOs, with more certainty on valuation. During 2020 and 2021, when pet spending surged and consumer subscription businesses looked invincible, two pet companies took the bait.

BarkBox, the subscription box company known for themed monthly toy-and-treat packages, announced its merger with Northern Star Acquisition Corp in December 2020. Wag, the on-demand pet services platform, announced its deal with CHW Acquisition Corporation in early 2022. Both deals promised expansion capital, public market liquidity, and validation of the "pet economy" thesis.

At the time, these looked like wins. The numbers that followed tell a different story.

BARK's $1.6 Billion Lesson

The BARK-Northern Star merger closed on June 1, 2021, valuing the combined company at $1.6 billion enterprise value. BARK received approximately $427 million in proceeds. The plan was ambitious: expand beyond subscription boxes into food (BARK Eats), dental products (BARK Bright), and retail partnerships.

The stock peaked at $19.54 in December 2020, during pre-merger hype. By January 2026, it hit an all-time low of $0.53. Current price hovers around $0.89, with a market cap of roughly $152 million.

That's more than 90% value destruction from the implied merger valuation.

The revenue didn't collapse. BARK posted $484 million in fiscal 2024. But revenue without profitability means nothing in public markets. The company continued posting net losses. The product line extensions didn't gain traction. Customer acquisition costs stayed high while lifetime value remained uncertain.

Public investors asked questions private investors hadn't. What's the churn rate on a subscription box? How many customers actually add food or dental products? What does this company look like at steady-state, without pandemic tailwinds?

The answers weren't good enough.

Wag's Path to Bankruptcy

Wag's SPAC merger was troubled before it closed. The deal with CHW Acquisition completed on August 10, 2022, but the numbers revealed the market's true sentiment: approximately 98% of SPAC shareholders redeemed their shares rather than hold stock in the combined company.

Redemptions are a SPAC-specific signal. Shareholders can either convert their shares to stock in the new company or redeem them for cash. When 98% choose cash, they're voting with their feet. They looked at Wag's business and wanted no part of it.

Instead of the hundreds of millions originally projected, Wag received roughly $30 million in term financing plus $16 million in PIPE funding. The company started public life undercapitalized and overvalued.

What followed was a slow-motion collapse. Nasdaq sent compliance notices for bid price below $1.00, market value of listed securities below $50 million, and market value of publicly held shares below $15 million. The company filed for Chapter 11 bankruptcy. Trading was suspended and the stock delisted on July 30, 2025. Common shares were cancelled.

The gig economy model for pet services never worked at scale. Revenue came from connecting pet owners with walkers, sitters, and boarders. Wag took a percentage of each transaction. But attracting supply (caregivers) and demand (pet owners) simultaneously required constant marketing spend. Margins stayed thin. Unit economics didn't improve with scale.

Why the Market Punished Both

The BARK and Wag failures share a root cause: consumer enthusiasm for a product doesn't translate to sustainable unit economics.

Pet spending surged during the pandemic. BARK saw subscription growth. Wag saw booking volume increase. Both companies interpreted this as validation. The market interpreted it as a one-time demand spike that masked underlying problems.

Understanding who actually funds pet companies helps explain why private and public investors reached different conclusions. Venture capital optimizes for growth potential and option value. A $50 million Series C investor is betting the company might be worth $500 million someday. They can afford to be wrong 80% of the time if the winners win big.

Public market investors optimize differently. They want cash flow or a credible path to it. They discount "potential" and demand proof. When BARK and Wag entered public markets with negative margins and vague profitability timelines, public investors priced them accordingly.

The broader pet equity landscape tells the same story. Pet equities underperformed the S&P 500 by more than 25 percentage points over a three-year period. This wasn't SPAC-specific. It was a market-wide correction on pet company valuations that had gotten ahead of fundamentals.

What Founders Should Take From This

The lesson isn't "don't go public." The lesson is that exit method doesn't fix exit readiness.

SPAC, traditional IPO, and M&A are all paths. None of them transform a business that can't stand on its own. Both BARK and Wag raised at valuations the market later rejected. The mechanism didn't cause the problem. It revealed it.

For most pet companies, the realistic exit landscape looks different. 2025 saw 532 M&A transactions in pet, a 41% increase over the prior year. Multiples compressed: PE deals averaged 12.2x EBITDA, strategic deals averaged 8.1x. That's down significantly from 2024 levels. But for businesses with real cash flow and defensible positions, capital is available.

Understanding what actually drives pet company valuations matters more than chasing a particular exit type. Recurring revenue, clean operations, and credible unit economics command premiums. One-time purchase businesses, customer acquisition dependency, and "growth stories" without profitability get discounted.

The founders who learn from BARK and Wag will ask harder questions earlier. Not "what's my valuation?" but "what does this company look like at steady-state?" Not "how fast can we grow?" but "does growth improve our margins or dilute them?"

Public markets answered those questions for BARK and Wag. The answers cost investors billions. For founders watching, the tuition was free.