Walmart Stores has officially announced its acquisition of online retailer Jet in the biggest deal in U.S. e-commerce startup history! The deal values Jet at $3bn, with $300m of Walmart shares to be paid over time for Jet executives, including co-founder and CEO, Marc Lore. Jet was founded in mid-2014 with ambitious plans to take on ecommerce giant, Amazon! However, Walmart have struggled to compete in the online market, with growth remaining at around 7% and sales of $14bn compared to Amazon’s $99bn revenue!
The acquisition has left many sceptical as, despite Jet swiftly reaching a billion-dollar valuation, they have spent millions to acquire customers and have yet to turn a profit. In addition to this, while they have seen an increase in the number of customers, Jet have been unable to obtain them, with the average customer purchasing just 1.5 times, compared with 2.2 for target and 2.1 for Walmart!