This could be put down to another legacy corporation failing in an apparently desperate move to keep up with the times, having acquired the then two year old company for $3.3bn.
It was such an astonishing acquisition it was GCV’s Exit of the Year 2017 award winner.
But as journalist Dan Primack accurately wrote in his Axios Pro Rata blog: “Appearances can be deceiving. Not only was this deal not a failure for Walmart, but it arguably was the retail industry’s most successful acquisition ever of a tech company…
“The deal wasn’t really about Jet.com as a product or a technology. It was about [CEO and founder, Marc] Lore, who was put in charge of Walmart’s entire e-commerce business, and his team. In short, this was a gussied-up acqui-hire.
“Walmart’s e-commerce sales skyrocketed since the deal, including a 37% bump in 2019. And that’s all before the pandemic forced changes to consumer behavior, which began to be reflected in a 74% surge for Walmart e-commerce in Q1 [first quarter] 2020.
“Lore hasn’t gotten close to defeating Amazon, but he’s helped transform Walmart into one of its largest and most viable rivals. That’s a pretty strong return on investment, even if Jet.com is grounded.”
While credit is due to Lore and the so-called acqui-hire, Walmart has moved shrewdly to back up its buying strategy with some smart approaches to building, partnering and investing (the other three core innovation tools).
Doug McMillon, Walmart’s president and CEO, described the takeover at the time as “another jolt of entrepreneurial spirit being injected into Walmart”. In March 2017, Walmart set up an incubator called Store No 8 – named after an outlet in Arkansas where Walmart founder Sam Walton experimented with new retail ideas – which from this year being run by Jaya Balasubramaniam as head of incubation out of New York City.
Concerning partnering and investing, Walmart has a number of approaches. Its main landlord, Prologis, effectively acts as a scout for supply chain and other tech investments. Prologis Ventures, under GCV Rising Stars 2020 winner Will O’Donnell, backed virtual reality training company Strivr’s $30m series B round earlier this year.
Back in 2017, Walmart said it would use Strivr to train managers at its Academy Training Centers across the US, and then went out and bought 17,000 Oculus Go VR headsets to train a million employees at its retail outlets.
Even more intriguingly, Walmart, which is still run and owned by the Walton family through multiple generations, has active, institutionalised family office structures. These are both individual and through Walton Enterprises and a dot.org structure for sustainable investments.
Together, this network and reach creates the opportunities, but it is the entrepreneurial drive to continue succeeding that turns chances into successes.
As Store No 8 says: “Sam Walton. The original innovator, fearless entrepreneur and retail rock star. He wanted to buck the system and push things beyond where they’ve been. We do too.”
We are delighted to be able to discuss the Buy, Build, Partner and Invest strategies used by successful groups, such as Cisco, to break down the toolsets corporations need to improve speed of innovation and seize the initiative to deliver on their visions at the GCV Digital Forum on June 3 and 4, with stars Linda Yates and Paul Holland at Mach49, Karen Elisabeth Ohm Heskja, investment manager at DNB Ventures, and Pratima Aiyagari at Paladin Capital.
