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Zulily co-founder Mark Vadon speaks at the 2014 GeekWire Summit. (GeekWire photo)

E-commerce pioneer Mark Vadon, who helped transform the way people buy engagement rings with Blue Nile and kids clothes with Zulily, has done it again. This time in pet supplies.

Reports surfaced yesterday that PetSmart was paying a whopping $3.35 billion for Chewy, a six-year-old online retailer of dog food, squeaky toys and other pet supplies. Recode’s Jason Del Rey called it the largest e-commerce acquisition in history, even eclipsing the $3.3 billion that Walmart paid for last year.

And guess who was an early backer and chairman of Fort Lauderdale, Florida-based Chewy? That’s right Vadon, the Seattle entrepreneur who has made a bit of a speciality out of competing in online retail niches not yet dominated by Amazon.

Despite his success, Vadon keeps a relatively low profile. That’s intentional, and something he also passes on to the companies he helps build. Even though Chewy boasts more than three million customers, the company is not quite a household name (Even for someone like me who is a dog owner).

“When you are drilling and you hit an oil patch, the last thing you want is people coming and drilling right next to you,” said Vadon at the 2014 GeekWire Summit, one of his rare public speaking appearances.

Vadon, who lives in Seattle and serves on the boards of Home Depot and Liberty Interactive, sold Zulily to Liberty Interactive’s QVC for $2.4 billion in 2015. He was also the co-founder of Blue Nile, an early e-commerce player which completed an IPO in 2004 and then last year agreed to be acquired for $500 million in a private equity deal.

“We found a white space — a consumer opportunity, where it isn’t being dominated,” said Vadon at the 2014 GeekWire Summit when speaking of Zulily. “If we went head to head with Amazon, we’d get crushed.” (Full video here).

Mark Vadon
Mark Vadon at the GeekWire Summit

Vadon, who invested $5 million of his own money into Chewy, appears to have noticed a similar white space in the pet supply market.

Interestingly, Vadon did not actively seek out Chewy. The founders wanted him on the board, so after Vadon showed some mild interest in the idea, they hopped on a flight from Miami to Seattle to convince the entrepreneur that he should get involved. Not too long after, Vadon wrote his $5 million check, a bet that is paying off big time given the premium that PetSmart paid for Chewy.

In fact, investment banker Paul Cuatrecasas, CEO of Aquaa Partners, noted in a note that PetSmart is “effectively betting the company on this deal,” given that the brick-and-mortar retailer was valued at about $8 billion two years ago.

When contacted by GeekWire, Vadon declined to comment about the Chewy deal, noting that it has yet to close.

PetSmart is a juggernaut in the online pet supply retail business, and the Chewy deal will help position it against Walmart and Amazon as more shoppers head online.

“We are focused on improving our customers’ experience in-store and online as we continue to execute against our long-term strategic initiatives,” said Michael Massey, president and chief executive officer of PetSmart, in a press release. “Chewy’s high-touch customer e-commerce service model and culture centered around a love of pets is the ideal complement to PetSmart’s store footprint and diverse offerings. Together, PetSmart and Chewy will provide the most convenient customer experience to a wider base of pet parents across every channel.”

Interestingly, PetSmart rival Petco is a backer of, the Seattle-based online marketplace that matches pet owners with pet sitters. With the Chewy deal now in the books, could we see more acquisition activity in this arena?

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