E-Commerce Startup Jet Raises $500 Million, at $1.5 Billion Valuation

Jet.com CEO Marc Lore talking to staff ahead of the company’s website launch.
The Wall Street Journal

Jet.com Inc. said it had raised $500 million of fresh equity in a new funding round that values the e-commerce startup at $1.5 billion.

Mutual-fund giant Fidelity Investments led the round, joined by previous investors.

Jet said it also expects to obtain $125 million in debt financing, including a $50 million increase in a credit line from Silicon Valley Bank and $75 million from venture debt investors. It also plans a smaller amount of “strategic financing.”

Jet founder and Chief Executive Marc Lore declined to name any other new investors in the round, nor the source of the venture debt or details of the strategic financing.

Jet is challenging Amazon.com Inc., Wal-Mart Stores Inc. and other e-commerce players with an array of household items, electronics, pet supplies more. It initially planned to sell $50 annual memberships for access to discounted prices, in hopes of attracting more customers to the site, but abandoned that plan in October.

Before the latest financing, Jet had raised about $195 million of equity and debt, said Mr. Lore. He said the company has received $350 million of the new investment, and expects to receive the remaining $150 million by the end of the year.

The funding provides a badly needed infusion as the company had been running low on cash.

The Wall Street Journal reported in early November that a recent financial plan showed the company projected it would have $63 million of cash on its balance sheet by the end of October and was forecasting a cash drain of $76 million in November and December. Mr. Lore said Jet now expects to burn less money before the end of the year and to consume about $417 million during 2016.