Marc Lore, Founder & CEO of

JET.COM and the biggest e-commerce bet ever!

The company was acquired for $3,3B by Walmart, just about 12 months after its official launch!

Calling this a big deal is an understatement.

This company is all about breaking records, and have done so from its inception. In total, it raised $565M in 4 rounds of funding from 19 of the best investors in the world (source:

To understand this success story, we must study Mr. Marc Lore, the founder of Marc Lore is a great pitchman and he’s certainly one of the best in the e-commerce world.

Indeed, prior to founding, he had created an online sports cards trading company “The Pit”, later selling it to Topps Co. for $5.7 million in 2001.
In 2005, Mr. Lore started his second company “Quidsi”: an e-commerce firm that ran sites like,,, and others in the online care products area.

Marc Lore knew his industry very well and Quidsi raised about $60 million from top venture capitalists firms. It was doing great until Amazon decided to enter the space and declare a price war.

This fierce battle with Amazon saw Quidsi’s flagship brands bleeding cash and burning profits. So much so that in 2010 the company ultimately got no other options but to sell out… to its rival Amazon for $550M.

That’s almost ten times the amount of money the company raised in venture funding. Nice return on investment for a “forced-sell-out”.

After working for two years at Amazon, Mr. Lore left and started to pitch VCs again. This time he was on his way to take out the largest player in his space: Amazon itself.

Call it the biggest bet in online shopping. Mr. Lore is certainly the one and only man who can go after such an ambitious vision.

The company he founded,, was infused with cash from the idea stage.
Portrayed as the biggest e-commerce bet ever and rightly so, it raised beyond $140M before launching!
That’s a lot of cash for a “startup”! But the e-commerce space is special: to make it work, “you just have to get to scale,” according to Marc Lore. We’re talking billions of dollars here!

Before’s launch in July 2015, Mr. Lore told The Wall Street Journal he expected the company to reach profitability by 2020 once it sells $20 billion worth of products a year. He said Jet’s business model is “100% proven viable at scale.”

Effectively, the e-commerce has a very high barrier to entry: much, much capital is needed. We’re not talking about your own little online boutique powered by shopify, we’re talking a large scale online shopping destination that offers and ships millions of products in a snap.

For that to happen, a lot of money is needed to at least build things up and get them running. So building an Amazon competitor is virtually impossible, unless you have mountains of cash and the best e-commerce expert on board, from day one.
… all of which Mr. Lore had, from the very start.

So did the prophecy realized itself?
In October 2015, 3 months after their launch, the plan to use a fee-based membership model was dropped. That was big news. Indeed this fee-based membership model was Jet’s core offering and its positioning/differentiator on the marketplace.

For a company to drop their core offering/positioning that fast means they must have done something wrong. Probably the numbers…
Jet was offering for free this “magic membership-saving” to early customers to entice traffic, purchases and signups; but that meant no profits in sights.

Beyond the big marketing spendings (TV ads), the site was losing money on every order.
Some would justify by saying they are here to “take on the market”, not to squeeze margins from the get-go. And besides, Amazon wasn’t profitable until far down its existence.

Yet, Jet clearly saw it couldn’t sustain this strategy of “magic membership-saving”, and certainly not for free.
In early 2016, re-positioned itself with a ”realtime pricing algorithm” as a smart pricing online store that discounts your basket the more you buy: “prices drop as you shop”.
For this to work, of course (you’ve understood by now): it needs to reach scale.

And it’s only through a clever way of scaling orders and wise shipping that Jet can hope to see some profits down the line. It’s a business of retail ordering management, and complex delivery convenience. On one side, the site must have a wide selection of desired products from customers, requiring a crazy product access and retail purchase scale advantage. On the other side, it must have sophisticated delivery logistics to optimise shipping at its maximum.

In May 2016, entered the groceries delivery business, competing directly with AmazonFresh and Google Shopping express. That being said, groceries delivery is a low-margin business, and there again, reports indicated that Jet was bleeding money in its quest to take on Amazon. (source: WSJ)

Let’s look at some numbers:
Projecting to do $1B in sales in 2016, is a growing and promising player in the e-commerce space indeed. In fact, it’s a record. Sell $1B of goods one year after the launch is mind-blowing.

Sure, the company raised more than half of what I made in revenue, but hey, it’s only 2 years old and has been officially open for 12 months, yet still generating that much cash.
Okay, there’s no profit, and it’s losing a lot of money. But hey, that’s a “Startup Land Classic”, isn’t it? And it’s in the big e-commerce business whereby the land of profits only appears visible at scale (think Alibaba and Amazon).

For a comparison, Walmart’s e-commerce wing was generating $14B revenue in 2015. That’s not much for the all-time retail giant. This company is +50 years old, with a well-known brand, product and distribution scale advantage… and is generating 11 times less revenue than Amazon (+$160B). isn’t the striving part of their business, nor their priority.
We have a classic “innovator’s dilemma” scenario here, whereby Walmart’s cash cow is the physical stores, they operate and have run well for the last century, against their online branch that arrived late in the game while not being as cutting edge nor fierce as Amazon.

Snapping, the rising star of e-commerce, that early along with one of the greatest leader in this space for “only” $3,3B makes total sense!
Here’s the simple reasoning: combining Mr. Lore, the sharpest guy on e-commerce, to lead as the head of online operations along with their product and distribution scale advantage, Walmart will finally be in a great position to truly gain market shares online.

July 2014: raised $55M
Sept 2014 raised $25M
Feb 2015: raised $140M
Nov 2015: raised $350M at a $1,35B valuation

The total amount of money raised in 2 years is $570M and the company got acquired for $3,3B. That’s almost a 6X return in 2 years!

In conclusion, there’s three points to take out here:

-Walmart had actually no other options than to make this smart move that isn’t too expensive practically speaking when you look at the numbers in the e-commerce space.

-The fight is still ahead though and the opponent, Jeff Bezos, leading Amazon is absolutely fierce and very efficient as well as innovative, so it’s only getting increasingly competitive and thrilling!

-Finally, the big winners in this story are the venture capitalists, once again, like on the previous story about the acquisition of Dollar Shave Club by Unilever. Indeed, cashing out big time less than 2 years after funding the startup is quite an impressive outcome.