This funding, from Western Technology Investments and Silicon Valley Bank, comes shortly after Jet raised $55 million in July from NEA, Accel Partners, Bain Capital, and MentorTech Ventures.
Although details about what Jet will sell or do are still hazy, Lore promises that it will be a “new kind of e-commerce experience, uniquely grounded in transparency and customer empowerment.”
Re/Code’s Jason Del Rey has heard from sources that Jet will dynamically price products based on how close they are to the buyer, which would let it undercut prices on other sites, like Amazon.
The back-story between Amazon and Lore is quite interesting:
In 2010, Amazon bought Quidsi — the e-commerce company responsible for Diapers.com, Soap.com, Wag.com, and other sites — for $US540 million.
Quidsi’s founders, Marc Lore and Vinit Bharara, made a killing, but the sale wasn’t entirely sweet.
Before the acquisition, Amazon had more-or-less declared a pricing war against Diapers.com. Amazon started offering deep, deep discounts on diapers, trying to undercut the smaller company. This was not the first time that Amazon was willing to lose money temporarily to stave off a competitor. Not long after Amazon started its aggressive price chopping, Quidsi sold.
Now, Lore has assembled a team of more than 30 employees (including many former Quidsi people) to launch Jet. Bharara will reportedly not be involved.
The site — which now has $US80 million in funding — won’t launch until later this year, partially because of a non-compete clause from Amazon that hasn’t run out yet, Fortune sources report. Since Lore has already been up-close-and-personal with Amazon’s most brutal competitive tactics and strategies, he’s better prepared than anyone to take it on.
Here’s Lore’s full post:
As reported this morning in the Wall Street Journal, I am excited to announce that Jet has secured an additional $US20mm of growth capital from Western Technology Investments(“WTI”) and a $US5mm asset-backed facility from Silicon Valley Bank (“SVB”), bringing our Series A round to a total of $US80M. We believe this capital is an incredible first step on our ambitious journey.
Jet is building a new kind of e-commerce experience, uniquely grounded in transparency and customer empowerment. Over the last two decades, technology pioneers have already worked to turn these ideals into reality. Dell’s build-your-own model changed how people shopped for computers, revealing component pricing and allowing customers to pay only for the hardware they valued. Priceline’s name-your-price tool enabled travellers to declare what they were willing to pay for a trip, while giving airlines a way to efficiently monetise empty seats. Zipcar and Airbnb reduced costs for consumers by maximizing usage of previously underutilized assets. Today, Uber is delivering car-service on demand by instantly connecting riders with rides, a welcome disruption to an otherwise friction-filled customer experience.
In retail, e-commerce brands have fundamentally altered the way people shop – putting more power in consumers’ hands through democratizing tools like price comparisons, ratings and reviews. But there is still more work to be done if we are to truly to live up to our stated ideals of greater transparency and customer empowerment. We have to ask ourselves: What are the hidden costs in e-commerce? Are there aspects of e-commerce that don’t make sense? And most importantly, how do we expose these inefficiencies and empower customers to eliminate them?
We are building Jet to answer these questions — and to further the customer empowerment revolution begun by those before us. We will be sharing additional details about Jet in the coming weeks and encourage you to sign up to receive updates at Jet.com.
Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.
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