Company With Philly Roots Bought by Walmart for $3.3 Billion
It seems that since the investment stages, Jet.com has been going for GOAT, and it hasn’t fallen short. In April of 2015, the e-commerce site was the biggest investment ever made by MentorTech Ventures, a venture capital firm that invests in startups by alumni of the University of Pennsylvania. Over a year later, on Monday, Jet was bought by Walmart for $3.3 billion in the largest purchase of a U.S. e-commerce startup ever. Are you sensing a trend?
A popular Amazon competitor, Jet was founded in 2014 by Penn graduate Marc Lore. Jet customers are promised the lowest prices on items ranging from health and personal care to electronics. In an interview with Re/code, Lore said that Jet provides prices 5 percent to 6 percent lower than competitors by not up-charging their products. The company reportedly garnered $80 million in investments before it even launched. About $8 million of that was invested by MentorTech Ventures, a sum that required the firm to organize a side fund — a $5.5 million special purpose vehicle — specifically for Jet. According to Technically, MentorTech used this strategy once before, to fund Lore’s first company Quidsi. Quidsi was bought by Amazon in 2011 for $545 million.
According to Walmart, the acquisition of Jet will allow the company to strengthen its app and serve its growing customer base, while granting shoppers a faster and easier consumer experience.
“We believe the acquisition of Jet accelerates our progress across these priorities,”said Doug McMillon, president and CEO of Wal-Mart Stores, Inc. in a statement. “Walmart.com will grow faster, the seamless shopping experience we’re pursuing will happen quicker, and we’ll enable the Jet brand to be even more successful in a shorter period of time. Our customers will win. It’s another jolt of entrepreneurial spirit being injected into Walmart.”
According to the statement, the Walmart and Jet brands will remain separate. In addition, Lore will now oversee Walmart.com and Jet.
“We started Jet with the vision of creating a new shopping experience,” Lore said. “Today, I couldn’t be more excited that we will be joining with Walmart to help fuel the realization of that vision.”