Wal-Mart Stores on Monday announced a deal to acquire the fast-growing e-commerce startup Jet.com for $3.3 billion in cash and stock, heralding the move as "another jolt of entrepreneurial spirit being injected into Walmart.”
The Bentonville, Ark.-based retailer said the deal is for $3 billion in cash, to be paid over time, and $300 million in Walmart stock. It is subject to closing conditions. Walmart said the companies would continue to operate as separate brands, with Walmart.com offering its customary EDLP and Jet providing "a unique and differentiated customer experience with [a] curated assortment."
Walmart and Jet will leverage technology solutions from both companies to develop new offerings.
“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,” Doug McMillon, president and CEO of Wal-Mart, 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. Our customers will win. It’s another jolt of entrepreneurial spirit being injected into Walmart.”
Walmart highlighted Jet.com's appeal among Millennial shoppers and urban shoppers among its strengths. The year-old company was adding approximately 400,000 new shoppers a month and processing 25,000 orders per day. Walmart also lauded Jet's "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," and Jet's select group of more than 2,400 retailer and brand partners "tailored to create an attractive and distinctive assortment for consumers."
Jet co-founder and CEO Marc Lore, and co-founders Mike Hanrahan and Nate Faust, will join Walmart. Lore previously co-founded and led Quidsi, the parent company of e-commerce sites Diapers.com, Soap.com and Wag.com. With the help of Faust and Hanrahan, Lore grew Quidsi into a prominent and successful business that was sold to Amazon.com.
“We started Jet with the vision of creating a new shopping experience,” Lore said in a statement. “Today, I couldn’t be more excited that we will be joining with Walmart to help fuel the realization of that vision. 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.”