Jet

Jet.com was a U.S. online retailer that tried to win customers with real-time pricing. Its pitch was that baskets got cheaper when shoppers bought more items, picked items that shipped together or waived free returns. Marc Lore, Mike Hanrahan and Nate Faust founded it in April 2014 and based it in Hoboken, New Jersey. Lore had previously co-founded Quidsi, the parent company of Diapers.com, Soap.com and Wag.com. Jet launched publicly on July 21, 2015 with about 4.5 million products.

Jet raised one of the largest pre-launch venture totals in consumer e-commerce. Accel provided early seed capital, and the company raised $140 million in February 2015. In November 2015 it raised $350 million in a round led by Fidelity, with the option to raise up to $150 million more. Across four rounds Jet raised about $820 million from investors including GV, Goldman Sachs, Bain Capital Ventures, Accel, Alibaba Group and Fidelity. The model spent heavily on discounts. In one documented order, Jet sold goods that cost it $518.46 for $275.55.

On August 8, 2016 Walmart agreed to buy Jet for about $3 billion in cash plus $300 million in Walmart shares, both paid over time, and the deal closed in September 2016. At the time Jet reported $1 billion in run-rate gross merchandise value, 12 million SKUs, more than 400,000 new shoppers a month, about 25,000 orders a day and more than 2,400 retail and brand partners. Walmart's fiscal 2017 10-K put the purchase price at $2.4 billion net of cash acquired, plus about $0.8 billion to be accounted for as compensation, and recorded $1.7 billion of goodwill. Walmart moved most Jet staff to Walmart.com in June 2019, announced Jet's shutdown on May 19, 2020, and closed the site in June 2020.

For venture investors, Jet is a case of an exit that came from strategic value, not proven unit economics. Backers that entered from seed through the 2015 growth rounds sold to a strategic buyer about two and a half years after founding, before the business was profitable. What Walmart paid for was the team, the technology and a younger urban customer base, a point it made in its own announcement. The Jet brand was then shut down within four years. Much of Walmart's consideration went to retention compensation, so the headline price overstates what preferred shareholders received.