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UPDATE 1-Jet raises $140 mln in bid to take on Amazon
February 12, 2015 / 1:00 AM / 3 years ago

UPDATE 1-Jet raises $140 mln in bid to take on Amazon

(Adds details on Jet, founder’s comments)

SAN FRANCISCO, Feb 11 (Reuters) - Jet, the startup founded by former Amazon.com Inc executive Marc Lore that hopes to change the way consumers shop online, has raised $140 million in its latest funding round, led by Bain Capital Ventures.

The company said on Wednesday other investors that participated in the funding round included Google Ventures, Accel Partners, Coatue, General Catalyst, Goldman Sachs and Temasek.

Jet has ambitions to build a more flexible buying system that allows customers to save be setting preferences with products, rather than the more direct sales model now employed by dominant e-commerce firms Amazon and eBay Inc.

Jet will launch its service this spring. It will be inspired in part by Costco Wholesale Corp, which passes on savings to buyers by selling in bulk.

Like the more established brick-and-mortar retailer, Jet hopes to earn mainly membership fees, while helping buyers save in a variety of ways, for instance when they buy several products from the same store or nearby stores, or through lower shipping costs if speedy delivery is not required.

“We’ve seen wholesale clubs innovate around price by re-imagining traditional retail economics before. Leveraging a membership model, they found ways to take costs out of the system,” Lore said in a blogpost.

“In doing so, they unlocked significant savings for members and transformed how people shop; today over 80 million Americans are wholesale club members.”

Jet is now building an online system that it hopes will be able to match a plethora of options from delivery speed to optimal product selection with buyers’ searches in real time - a potentially costly undertaking given the amount of computational power required.

Lore said in an interview that Jet has signed on over 350,000 “Insiders” or initial members over 73 days. Jet will begin letting in buyers next month to test a core service or platform that he said is designed to work almost akin to a real-time exchange trading system.

Lore, who in 2010 sold diapers-to-soap online commerce firm Quidsi to Amazon for $540 million, has raised about $80 million for Jet previously. The startup’s latest funding was first reported by the Wall Street Journal.

Reporting by Edwin Chan; Editing by David Gregorio and Andrew Hay

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