US-based e-commerce company Jet.com has raised $350m in new funding at a $1bn pre-money valuation from investors including e-commerce group Alibaba and internet technology conglomerate Alphabet, Re/code reported yesterday.
The series C round was led by financial services firm Fidelity and also includes Bain Capital Ventures, the venture capital arm of private equity firm Bain Capital. Alphabet invested through its Google Ventures unit.
In addition to the funding received in the round, Jet has secured verbal agreements for another $150m, and the amount raised could rise even higher if the company can attract strategic investors and potentially debt financing, CEO Marc Lore told Re/code.
Founded in 2013, Jet initially operated in stealth before launching commercially in July 2015. It operates a diversified e-commerce service with a pricing structure that gives customers discounts if they buy greater quantities, and despite eliminating its annual membership fee last month, aims to enter profitability by 2020.
In the meantime, Jet will look to scale its business in order to compete with other diversified retailers such as Amazon or WalMart, and will invest the new capital in hiring, marketing and customer support.
The $350m raised brings Jet’s total funding to $570m. It follows a $140m round backed by Google Ventures, Bain Capital Ventures, Goldman Sachs, Accel Partners, Coatue Management, General Catalyst, MentorTech Ventures, New Enterprise Associates (NEA), Norwest Venture Partners, Silicon Valley Bank, Thrive Capital and Temasek in February this year.
Jet had earlier closed $80m in debt and equity from NEA, Accel, Bain, Mentor Tech, Western Technology Investments and Silicon Valley Bank in September 2014, but Lore said the company found the going harder this time.
“It was definitely a challenging financing environment, no question about that,” Lore said. “And the fact we were able to get as much demand as we did at the valuation we had is just a testament to our performance to date and the size of the overall opportunity and the team we assembled.”