How Marc Lore sold Jet.com to Walmart for $3,300,000,000

1. Who is Marc Lore?

Marc Lore was born on May 16, 1971, in Staten Island, New York, USA.

He is the founder of Jet.com , an e-commerce company known for its innovative pricing algorithms and dynamic pricing model, that he sold to Walmart for $3,300,000,000 in 2016.

Marc is currently working on Wonder, a food delivery startup that aims to be the “super app of mealtime”. He is also involved in the project of building Telosa, a proposed sustainable city in the American desert.

Besides, Marc is the co-owner of two basketball teams : the Minnesota Timberwolves of the NBA and the Minnesota Lynx of the WNBA.​

2. What did Marc do before launching Jet.com that contributed to his success?

• Marc started his entrepreneurial journey early, founding a baseball card company called The Mint while he was still in high school. The company was focused on buying and selling baseball cards, which were highly popular and valuable collectibles at the time.
• In 1993, Marc graduated from Bucknell University where he studied Business Management and Economics.
• From 1993 to 1999 he worked for different international banks, mostly in the risk department.
• In 1999, Marc founded The Pit, an online marketplace for trading sports cards, which utilized a stock market-like format for buying and selling. In 2001, he sold it to the Topps Company for $5.7 million.
• In 2005, Marc co-founded Quidsi, the parent company of Diapers.com. Diapers.com specialized in baby products and grew rapidly due to its efficient logistics and customer service. The success of Diapers.com led to the launch of other verticals such as Soap.com and BeautyBar.com. In 2010, Quidsi was acquired by Amazon for approximately $545 million.
• From 2010 until 2012, Marc kept working at Amazon following the acquisition.

3. How did Marc come to launch Jet.com?

In 2012, Marc Lore left Amazon to explore new entrepreneurial ventures.

He noticed that while Amazon dominated the market, there was room for innovation, particularly in pricing strategies and customer acquisition.

Marc envisioned a new kind of online shopping platform that could offer lower prices through innovative technology. He developed the idea of a dynamic pricing model that adjusted based on factors such as order size, location, and shipping efficiency.

Marc assembled a talented team of executives and engineers with expertise in e-commerce, technology, and logistics to help build and launch the platform.

Jet.com was officially founded in 2014 with the mission to offer consumers the lowest prices on a wide range of products. The platform initially used a membership model but later shifted to a more traditional online retail model to attract a broader customer base.

After 6 months of beta-testing that had started in January 2015, Jet.com opened to the public in July 2015.

4.What were the key milestones reached by Jet.com?

• July 29, 2014: Raised $55,000,000 in Series A funding from New Enterprise Associates (NEA), Accel Partners, Bain Capital Ventures and others.
• September 16, 2014: Raised $20,000,000 from Western Technologies Investment.
• February 11, 2015: Raised $140,000,000 in a Series B funding round. Investors include New Enterprise Associates (NEA), Accel Partners, Bain Capital Ventures, Alibaba Group, Google Ventures and additional participation from previous investors.
• November 24, 2015: Raised $350,000,000 in a Venture round. Investors include Fidelity Investments, Mutual Funds, Bain Capital Ventures, Google Ventures (GV), and additional participation from previous investors

5. What were Jet.com’s KPI right before selling?

• $1,000,000,000 in annual gross merchandise value (GMV) run rate.
• Around 4 million customers.
• After its last funding round, Jet.com was valued at $1,400,000,000.
• Around 1,000 employees
• Offering 12 million SKUs
• More than 2,400 retailers and brand partners
• A growing customer base of urban and millennial customers with more than 400,000 new shoppers added monthly and an average of 25,000 daily processed orders.

6. The Exit

On August 8, 2016, Marc sold Jet.com to Walmart for $3.300,000,000. 
The deal included $3 billion in cash and $300 million in Walmart stock.

7. How did Marc decide to sell Jet.com to Walmart?

Marc met with Walmart’s CEO, Doug McMillon, and they discovered a shared vision for the future of e-commerce.

They recognized the complementary strengths of Jet.com and Walmart, with Jet’s innovative technology enhancing Walmart’s vast logistical capabilities. This alignment sparked discussions about a potential acquisition.

In an interview, Marc Lore explained that selling to Walmart would alleviate the challenges of raising capital as a startup and would accelerate Jet’s path to realizing its vision​.

8. The Buyer

Walmart Inc. is a multinational retail corporation headquartered in Bentonville, Arkansas, and is one of the world’s largest companies by revenue. Founded in 1962 by Sam Walton, Walmart operates a chain of hypermarkets, discount department stores, and grocery stores.

Walmart’s revenue for the fiscal year 2016 was approximately $482 billion with a net profit of approximately $14.7 billion. The company valuation was at the time oscillating between $200 billion and $250 billion.

9. Why did they acquire Jet.com?

Walmart acquired Jet.com for several strategic reasons:

1. Strengthen E-commerce Presence: Walmart aimed to boost its online presence and compete more effectively with Amazon by leveraging Jet.com’s advanced technology and innovative pricing algorithms.
2. Expand Customer Base: Jet.com’s focus on urban and millennial customers provided Walmart access to a demographic that was less engaged with its traditional stores.
3. Innovative Technology: Jet.com’s dynamic pricing model and sophisticated supply chain management were seen as valuable assets that could enhance Walmart’s existing operations.
4. Leadership and Talent: The acquisition brought in Jet.com’s experienced team, including Marc Lore, who became the president and CEO of Walmart U.S. eCommerce, driving Walmart’s digital strategy forward.
5. Increase Product Selection: Jet.com’s extensive product catalog and relationships with third-party sellers helped expand Walmart’s online offerings.
6. Enhance Delivery Capabilities: The deal improved Walmart’s logistics and delivery infrastructure, helping to provide faster and more efficient delivery services.
7. Competitive Edge: Acquiring Jet.com was a strategic move to better position Walmart against Amazon, its biggest competitor in the retail space.
8. Synergies: Walmart anticipated cost synergies and operational efficiencies by integrating Jet.com’s technology and business model with its own vast supply chain and logistics network.

10. Marc Lore’s Advice

1. Be willing to take risk

Marc decided to leave his high-paying banking job, where he earned $500,000 a year, just after having his first child. He didn’t know exactly what type of business he wanted to start but felt strongly about becoming an entrepreneur.

He went all-in, investing all his savings of $390,000 into his new venture. This marked the start of his successful journey into entrepreneurship.

2. Go all-in

Marc believes in creating a do-or-die situation where failure is not an option. He advises investing your own money and raising funds from friends and family. This approach helps uncover hidden resources and determination within oneself.

He only invests in people or companies who are fully committed and cannot afford to fail.

3. You need to have faith

When you start a company, you need to believe 100% that it’s going to work. That’s what will give you the motivation to work as hard as you can.
Your confidence will keep you going and inspire your team and investors. Believing in your vision helps you stay strong, make bold choices, and keep trying even when things get tough.

4. Work as hard as you can

During the 26 months he was building Jet.com, it was not uncommon for Marc to work seven days a week for many weeks in a row.

5. Be comfortable with failure

6. Follow the framework Vision — Capital — People

According to Mark, what you need to succeed is :

• A big vision i.e the dream and will to achieve something big.
• Raising enough capital to be able to hire the best team in the world to build and sell your product.

7. Hiring the best in the world

Hiring a great Chief People Officer is one of the first and most important decision you should make.

Marc relies on SPOTAKE in his hiring process — identifying people who are smart, passionate, optimistic, tenacious, adaptable, kind and empathetic.

8. Corporate culture needs to be consistent

Marc worked at Amazon, Walmart, and his own companies, each with very different cultures. These different corporate cultures can all lead to success, but consistency is key.

9. Define core values early on

Marc built Jet.com around three core values: Trust, Transparency and Fairness.

11. What is Marc currently working on?

Marc Lore is currently involved in several ventures and projects:

• He is the founder of Wonder, a food delivery startup that aims to be the “super app of mealtime”. One of the key features is allowing customers to order from multiple restaurants in a single order, delivering meals within 30 minutes.
• Marc is also involved in the project of building Telosa, a proposed sustainable city in the American desert. Telosa aims to house 50,000 residents by 2030 and grow to 5 million by 2050. The city is designed to be a model of sustainability, transparency, and affordability, incorporating advanced technologies and eco-friendly practices.
• Marc is also the co-owner of two basketball teams : the Minnesota Timberwolves of the NBA and the Minnesota Lynx of the WNBA.​

12. Connect with Marc

Linkedin: https://www.linkedin.com/in/marclore/

Twitter: https://twitter.com/MarcLore