Walmart this morning announced an agreement to acquire Jet.com for $3.3 billion in cash and stock, confirming widespread reports and uniting the companies in their common fight against e-commerce king Amazon.com.
The deal combines an ambitious e-commerce startup with a physical retail giant, both of whom have struggled to dent Amazon’s online business on their own. The companies will maintain their own brands but “leverage innovative technology solutions from both companies to develop new offerings to help customers save time and money,” they say in a news release.
“The combination of Walmart’s retail expertise, purchasing scale, sourcing capabilities, distribution footprint, and digital assets – together with the team, technology and business we have built here at Jet – will allow us to deliver more value to customers,” says Marc Lore, the Jet co-founder, in a statement about the acquisition.
The acquisition of the Hoboken, N.J., company is another big exit for Lore, who previously sold Quidsi, known for its Diapers.com site, to Amazon in 2010 for about $545 million.
Walmart and Jet say the acquisition “will infuse Walmart with fresh ideas and expertise, as well as an attractive brand with proven appeal, especially with Millennials, the first generation of true digital natives.”
Walmart released these stats about Jet.com to help explain the acquisition.
- Demonstrated ability to scale with speed, reaching $1 billion in run-rate Gross Merchandise Value (GMV) and offering 12 million SKUs in its first year.
- A growing customer base of urban and millennial customers with more than 400,000 new shoppers added monthly and an average of 25,000 daily processed orders.
- Best-in-class technology that rewards customers in real time with savings on items that are bought and shipped together, thereby reducing the supply-chain and logistics costs often buried in the price of goods.
- A select group of more than 2,400 retailer and brand partners tailored to create an attractive and distinctive assortment for consumers.
The deal is “another jolt of entrepreneurial spirit being injected into Walmart,” says Doug McMillon, Walmart Stores president and CEO.
“We’re looking for ways to lower prices, broaden our assortment and offer the simplest, easiest shopping experience because that’s what our customers want,” McMillon said in a statement. “We believe the acquisition of Jet accelerates our progress across these priorities. Walmart.com will grow faster, the seamless shopping experience we’re pursuing will happen quicker, and we’ll enable the Jet brand to be even more successful in a shorter period of time.”