Jet.com’s Founder Has Made a Lot of Money by Annoying Amazon
It’s a feat many entrepreneurs dream about, but few achieve: a multimillion-dollar acquisition offer from an industry giant.
Marc Lore has already lived out this dream once. In 2011, he sold his startup Quidsi (the parent company of a number of websites, including Diapers.com) to Amazon for $545 million.
And now it appears he’s about to do it again. According to a report from the Wall Street Journal, Wal-Mart is in talks to acquire the ecommerce company Jet.com, which Lore co-founded in 2015, for up to $3 billion.
The Journal paints the possible sale as a disappointing end for a company that, in a short amount of time, managed to put Amazon on its toes. It’s certainly true that an acquisition is a far less glorious outcome than if Lore was able to build Jet.com into a true Amazon rival. Some of techland’s most prominent companies — Facebook, Snapchat, Dropbox — owe their existence to founders’ refusal of early, fat acquisition offers. Perhaps Jet.com was destined for a similar trajectory, although there were troubling accounts that the startup was burning through its mountains of VC cash at an unsustainable rate. If the sale goes through, we’ll never know.
That said, it’s not hard to admire Lore’s strategy. The man has already made a killing by being a thorn in Amazon’s massive side: the ecommerce titan bought Quidsi for $545 million after the startup, which offered deep discounts on products such as diapers and cleaning supplies, forced the company to engage in pricing wars. And now, if the report is correct, the same strategy is about to land him a much larger windfall.
In less than a year, thanks to its big ambitions, more than $550 million in venture capital and low prices, Lore managed to turn Jet.com into a potential Amazon rival. And, per the Journal, while the likely sell illustrates “the challenges of attempting to go it alone in the hypercompetitive e-commerce market,” it’s also proof Jet.com has turned itself into a multibillion–dollar tool, one Wal-Mart can deploy in its own battle with Amazon. (An acquisition would give Wal-Mart access to Jet’s pricing software and its customer data).
If the deal goes through, Lore will no longer head up a company that has been dubbed the “Amazon killer”; instead, Jet.com will simply become one more weapon in Wal-Mart’s arsenal.
And so for the second time, it appears his efforts to go head-to-head with Amazon won’t end in its defeat. But by creating another company able to ruffle the ecommerce giant’s formidable feathers, he’s looking at an even bigger payout.