Singapore state-fund Temasek Holdings has joined an investment round led by Bain Capital Ventures, to pump in an additional $140 million into upstart Jet.com, that is hoping to rewrite as well as reinvent the rules of online marketplaces.
Touted as an Amazon competitor, Jet.com, which is yet to launch, and even sell a single product, has now raised $220 million in two rounds. A report in the Wall Street Journal pegged the company’s valuation at $600 million.
Investors are betting on the track record of its founder Marc Lore, a former Amazon.com Inc employee. Lore had founded and launched Quidsi, which operated sites like Diapers.com, and was acquired Amazon.com in 2010 for $550 million.
The other participants in the latest $140 million round led by Bain include, Accel Partners, Coatue, General Catalyst, Goldman Sachs, Google Ventures, MentorTech Ventures, NEA, Norwest Venture Partners, Silicon Valley Bank, Thrive Capital and as well as other unnamed strategic investors.
Details of the latest funding round was unveiled by Lore on his blog. He also said that Jet will use the money for ‘radical price innovation in e-commerce’.
“We believe that there is big opportunity to deliver meaningful value to mass consumers by optimizing the underlying economics of online shopping and unbundling the embedded retail costs that drive up price.”
“We see the opportunity to leverage technology and bring price innovation to an unlimited product selection by working collaboratively with our retail partners. We don’t compete with our partners; rather, we empower them with pricing tools that enable them to set different rules based on their business goals and profit targets. As a result, Jet is able to dynamically adjust prices in real time in response to the unique composition of a shopper’s basket… Customers save without having to sacrifice service or experience,” he had said in his blog.
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Jet, with about 130 employees on board, already, is expected to launch within the next two months, but the site will initially be open only to ‘insiders’. In recent media interactions, Lore has revealed that Jet had signed over 350,000 insiders, equivalent to initial members, who will begin testing the site beginning March. Jet’s website that is slated to be at par a real-time exchange trading system will be live to the general public later this year.
During interactions with investors, Lore has also said that Jet will compete on the cost factor.