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Amazon.com rival Jet.com raises US$140 million in new funding
[SAN FRANCISCO] Jet.com Inc. raised US$140 million in a new funding round before rolling out its service, building up its cash hoard to take on rival Amazon.com Inc.
The financing, led by Bain Capital Ventures, adds to the US$80 million that Jet previously raised. The round includes new investors such as Google Ventures, Goldman Sachs & Co. and Norwest Venture Partners.
A company representative declined to comment on valuation, which the Wall Street Journal put at about US$600 million.
In an interview, Jet Chief Executive Officer Marc Lore said the money will be used to expand operations and build a "real- time trading system for products." Lore, an e-commerce veteran who previously founded Quidsi Inc., said Jet is a Web shopping service that will offer 10 million products through its online marketplace and guarantee the lowest price.
An annual membership will cost US$50, compared with Amazon's US$99 annual price for its Prime membership, which also includes streaming of online music and movies.
The site will begin shipping to a small group in March before a wider rollout in the late spring, Lore said. The Montclair, New Jersey-based company will have three warehouses nationwide that will stock common household goods. The rest of the inventory will be sourced by third-party vendors, he said.
Jet will use software to procure products close to customers to reduce shipping costs, Lore said.
Jeff Crowe, managing partner at Norwest Venture Partners, said Lore attracted investors given his success building Quidsi, which was later acquired by Amazon, as well as guaranteeing the lowest prices online.
"Raising that amount of capital shows this is a real swing for the fences idea," Mr Crowe said.