Jet.com raises $500M from Fidelity at $1B pre

http://fortune.com/2015/11/04/jet-fundraising-fidelity/

by muzz • 11 years ago

39 47 11 years ago

fortune.com

ck25• 11 years ago

Jet first has to actually ship orders to stay in business.

Google for jet.com and "order canceled" and you'll get the idea.

It's a strange business model.

Not sure what they are doing with half a billion dollars since they don't stock any inventory themselves like Amazon.

bosdev• 11 years ago

I imagine a half billion dollars could change that, and in the process fix the problem you describe.

ck25• 11 years ago

If that's the case, why jet and not any other existing platform?

I mean I welcome any competition that brings my cost down as a consumer, but jet so far has been pretty much half-*ssed.

notjustanymike• 11 years ago

I did. Then I googled amazon.com and "order canceled" and saw the same thing.

ChuckMcM• 11 years ago

The tricky bit is who cancelled the order I think, Jet uses a "speculative" pricing model as far as I can tell, they think they can get you that price but then will bail if they cannot, see https://jet.com/purchase-terms so if you order something and you think "wow I got a great price on that." and then you get email that the order was cancelled because they couldn't get the purchase to go through, you would be annoyed.

ck25• 11 years ago

I have never, ever, in a decade of ordering from amazon had an order canceled. Never. They even let you order things sometimes that they list as "out of stock" but will be fulfilled when re-stocked and they keep you informed about the progress.

Even "lightning deals" are carefully measured with exact quantities remaining.

With jet, I've already experienced cancels twice and now pretty much don't plan to use them for anything I actually need. They do not have their own stock, they do not have a realtime inventory system with any of their vendors, and apparently either vendors lie to them about available stock or they allow people to order more than what is on hand.

We are basically beta testing jet for them. And I don't quite get what their business model is, we already have ebay which allows vendors to list products as a third party.

wahsd4• 11 years ago

I wish I were more of a huckster or con artist or snake oil salesman.

jonknee• 11 years ago

I actually saw a Jet.com purple box arrive at my building the other day. I did a double take.

digikata• 11 years ago

My jet orders arrived eventually, but their shipping time estimates were imaginary.

lukasm• 11 years ago

2x liquidation preference with 4x cap?

ivankirigin• 11 years ago

yeah, reminds me of sama post about this being debt not VC

harryh• 11 years ago

Almost certainly not. Jet isn't an established business with real traction/growth cashflow. This is definitely a real venture play. It'll either work and they'll be huge or it won't and it'll be worthless.

kak9• 11 years ago

Why when you already got the post money equity at 33%...

ruddct• 11 years ago

Can someone explain how Jet's business model isn't just selling (or rather, dropshipping) dollars for $0.90?

ck25• 11 years ago

Remember "buy.com" years ago which also was going to "take on amazon".

They did the same discounts and went under, bought by rakuten which then promptly exposed customer credit card info.

They are limping along today.

I suspect jet.com's end game is to be bought.

api• 11 years ago

For >$1B?

arethuza• 11 years ago

Value America was another good one - I never even noticed them when they were active but there was at least one moderately entertaining book about their antics that made my own adventures in the dot.com boom seem quite tame.

callmeed• 11 years ago

They'll make it up in volume

arbuge2• 11 years ago

Are they actually relying on dropshipping? At scale this could be problematic unless they have really reliable dropshippers to work with. Witness for example the customer service issues this caused Fab.com.

eistrati2• 11 years ago

I admire what they do, but I definitely don't understand how they do it :)

jazzyk• 11 years ago

The proven business model: sell at a loss, but make it up in volume.

Proven to go bust, that is.

eistrati2• 11 years ago

Yeah, $0.5B to experiment with that :)

wahsd4• 11 years ago

I'm not sure I understand the whole selling at a loss thing. Their stuff's expensive unless I'm just doing it wrong.

dmsimpkins• 11 years ago

I've really enjoyed reading about the technology behind Jet. They are definitely doing some cool stuff with their dynamic pricing engine and advertising (see this post: http://techgroup.jet.com/blog/2015/08-17-realtime-pricing-re...).

However, I've found the site to be a bit strange at times regarding pricing due to their inventory model. For example, a month ago I bought a large pack of diapers for around $30. A very good deal. Then, a few weeks later when I chose the the option to purchase the same item as before, the same pack of diapers appeared as $80. Very strange.

I've found similar pricing irregularities throughout the site. It's still very possible to find good deals, but I feel that people will be wary to use the site regularly if they cannot count on the item they want always being in stock at a competitive price. Perhaps I'm using Jet the wrong way. It's very possible that they don't care about being a one-stop shop like Amazon, and instead want to rely on traffic from very specific hits through Google Shopping. Regardless, it seems like they need focus, as right now the site seems to be in limbo.

dman• 11 years ago

Price volatility is what turned me off them - I had a price change on me in the same session.

samstave2• 11 years ago

Haha sounds like uber surge pricing

KasianFranks• 11 years ago

I think we've peaked.

wahsd4• 11 years ago

Which means we have about another couple months left? The unicorn herds will ride for as long as the rainbows sprinkle glitter.

theklub• 11 years ago

I thought we peaked the minute "unicorn" became a thing.

wahsd4• 11 years ago

"...Smartest way to shop and save on pretty much anything"

I think someone should explain to them what "smart" and "saving" mean. I just browsed some of their stuff and it seems that pretty much everything they list has a 20-40% markup over getting it at actual smart places, let alone just at a regular store. "Smart" for them if they can trick people? Is that the point I'm missing?

mesozoic• 11 years ago

I wonder what the liquidation terms were but even and highly favorable investor ones this one seems very bubbly.

StriverGuy• 11 years ago

Wal-Mart should buy Jet.Com.

Wal-Mart has over 4500 forward shipping centers throughout the country and can leverage them to beat Amazon prices. Walmart would be able to leverage the Jet.com tech brand cache and technology stack, a place where Walmart as a brand has utterly failed to capitalize.

godzillabrennus• 11 years ago

When I ordered from Jet.com it came from Walmart.

driverdan• 11 years ago

I'm curious what they did for due diligence. There are a lot of complaints about how Jet works (or doesn't), how scammy sellers are doing bait and switch, and how customer support isn't helpful. Their reputation isn't very good. I know I won't order from them until they add seller transparency and better support.

pravda• 11 years ago

I love Jet.com

Great prices, at least after their recent 20% discount. Got (5 cases!) cat food for less then it would cost locally and it gets delivered right to the door!

I can't imagine they made any money off me. I might even be a 'loss leader'.

If $500M from Fidelity keeps the ship floating for a while, God bless them!

rebeccaskinner• 11 years ago

I thought the entire point was that you were paying as close to cost as possible and they made their money off subscription fees?

samstave2• 11 years ago

Pets.com 3.0

jw989• 11 years ago

The main problem I have with Jet.com is that never have I or anyone I know (limited in breadth but still) thought "well, Amazon isn't providing me with what I need so I'll go to jet.com for this"

If anyone has had an experience like this I would love to hear it.

autobahn• 11 years ago

Jet's going to fail once the VC-subsidized deals go away.

MichaelGG2• 11 years ago

Of note, Jet.com uses F#. Business model aside, at least this might quash complaints from founders or managers that F# isn't useful or might decrease valuations (I've actually heard that one)

coleca2• 11 years ago

I heard their CTO give a talk that F# was an advantage for them because being based in NYC there are a lot of F# developers due to the finance industry. Your mileage may vary outside of NYC.

MichaelGG2• 11 years ago

Interesting. Though for any significant codebase, I can't imagine F# being the limiting factor. Any C# dev that couldn't work with F# probably isn't someone you want to hire in the first place. (Goes for pretty much any language.)

coleca2• 11 years ago

Looks like it may not be a done deal for that $500m.

http://www.businessinsider.com/jet-is-reportedly-close-to-ru...

Hope it's not true. Love to see competition in retail. Some of their ideas around up sells and targeted offers are completely obvious and yet no one is doing it. So tired of looking for and purchasing a product on AMZN or any other eComm site to be bombarded with offers for the same product or similar products. If I searched and purchased a red stapler on your site don't give me ads for another stapler, try and sell me staples or maybe paper. Just not another stapler. It's not a consumable.

Jet.com raises $500M from Fidelity at $1B pre

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