Marc Lore's Jet.com has closed its latest round of fundraising led by Fidelity Investments. The discount website that offers products ranging from grocery to furniture and electronics has raised $350m. Many of its earlier investors such as Alibaba, Google Ventures and Bain Capital Ventures have also participated in this round.
The $350m (£232.2m, €330.1m) funding raised puts the enterprise value of the e-commerce startup at $1.5bn. It said that an additional $150m funding was "expected shortly". Jet will try to take on peers like Amazon.com in its first holiday season with the help of this funding.
Some of the people backing the retailer opined that the company was created to take on Amazon because the founder's previous company Quidsi failed due to an intense price-war with Amazon over many products such as diapers. Quidsi was eventually sold off to Amazon for $500m in 2010. Lore, however, denied the same in an interview with The Financial Times.
Considering Amazon's large logistics network and its loyal Prime members, analysts say, Jet faces a tough challenge to compete with the Seattle-headquartered e-commerce giant. The website that was launched in July had raised $220m through a combination of debt and equity even before its launch. Including this round, its total fundraise sums up to $570m.
In terms of sales, Jet said that it sold $33.2m of merchandise in October, a 65% increase from its previous month. It expects this number to reach the $500m benchmark on an annualised basis by the end of the year.
The Hoboken-based start-up has dropped the membership fee that it had been charging in order to attract more customers. Its current business model offers larger discounts as customers increase their shopping basket with more items. This, apart from encouraging people to buy more, helps in reducing shipping costs.