As of March, Jet was on track to sell more than $1 billion worth of goods over the next 12 months, though it only records a fraction of that as revenue. The company typically takes a cut of 8 to 15 percent on these orders. The remainder comes from a network of more than 2,000 vendors who list their own products on Jet.com and ship orders to Jet customers from their own facilities. A little less than a third of its sales volume comes from items that Jet stores in its own warehouses and sells directly to customers, an exec recently told Recode. Jet sells more than 12 million products ranging from TVs to toys to cereal, and even milk and other fresh groceries in some markets. Lore previously co-founded ’s parent company and sold it to Amazon for $550 million in 2011 after the two sides battled through a pricing war that threatened to put the startup out of business. He joined Walmart in 2012 after a three-year stint at CBS Interactive. Walmart’s current global e-commerce chief, Neil Ashe, will eventually depart after a transitional period, these people said. It seems likely that he will report to McMillon, the CEO. Lore will stay on and run as well as Jet.com, two sources said. He will now have Walmart’s deep pockets - the company registered $15 billion in profits last year - to try to fuel more growth at Jet. Such a stake suggests Lore stands to make as much as $750 million in the deal.

Lore pulled the rip cord instead, but he will be rewarded handsomely - he owns about 25 percent of the company, according to sources. It most recently raised a $619 million round that gave it a value of more than $1.6 billion, but was going to have to keep raising huge sums of money to survive on its current path. Jet has secured more than $800 million in financing since its founding but is spending $20 million to $25 million on advertising a month to fund its growth. Jet.com was co-founded in 2014 by the entrepreneur Marc Lore in an attempt to build a new online megastore that would compete with the likes of Amazon, Walmart and Costco. Its growth rate has decelerated for five consecutive quarters. Walmart’s $14 billion in annual e-commerce sales is a fraction of Amazon’s $99 billion and is growing slower than the industry average. The deal is in many ways a marriage of necessity, but a shot worth taking, as I explained last week when news of the talks first broke. Lore spoke about battling Amazon on Recode Decode last December:

It’s still unclear whether that is the right strategy for the brick-and-mortar retailer. The Jet acquisition is an acknowledgement by Walmart CEO Doug McMillon that his company needs outside help if it’s ever going to close the giant gap with Amazon. e-commerce acquisition was last year’s $2.4 billion sale of Zulily, a public company, to QVC. Walmart and Jet declined to comment on the earlier report.įor Walmart, the purchase marks a giant bet on a largely unproven startup that only launched its shopping site widely last July. The announcement comes after Recode first reported the deal was finalized over the weekend. The deal includes $3 billion in cash, as well as $300 million in Walmart stock that will be paid out over time as part of an incentive bonus plan for Jet executives. e-commerce operations after the acquisition closes, according to sources. Jet co-founder and CEO Marc Lore will continue to run Jet as well as Walmart’s U.S.

Walmart, the world’s largest retailer, announced it will acquire two-year-old online retailer Jet.com for $3.3 billion in cash and stock in the largest-ever acquisition of an e-commerce company.

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