SAN FRANCISCO (Reuters, Diapers) - Singapore state-owned investment company Temasek Holdings is among investors in Jet, the startup founded by former Amazon.com Inc executive Marc Lore that hopes to change the way consumers shop online.
Jet said on Wednesday that it has raised US$140 million (S$190.40 million) in its latest funding round, led by Bain Capital Ventures. Other investors that participated in the funding round included Google Ventures, Accel Partners, Coatue, General Catalyst, Goldman Sachs and Temasek, it added.
Jet will launch its service, which among other things promises to pass on all savings from shipping and packaging to consumers, this spring.
Jet is the brainchild of Lore, the founder and former chief executive officer of Quidsi, a company best known for its most popular website, Diapers.com. He spent years competing with Amazon.com before getting clobbered in a price war and then, in 2010, selling out to the company for US$550 million.
Lore stayed on at Amazon for more than two years; now he's preparing to assault it.
He wants to reinvent the wholesale shopping club. Jet plans to open for business on a "friends-and-family" basis in January and will start limited sign-ups on Feb. 20. Customers will find just about everything, from clothes, books, and electronics to baby goods and athletic gear.
After a 90-day free trial period, Jet customers will be asked to pay US$49.99 a year for access to what Lore claims will be prices that are 10 per cent to 15 per cent lower than anywhere else online.
Like Costco, Jet plans to make money on membership fees. Every other savings will be passed along to the buyer. And like EBay and the dominant Chinese e-commerce player, Alibaba.com, it will function primarily as a marketplace, allowing other merchants to compete to offer their wares to customers.
But there's a twist: Shoppers can squeeze out more savings if they can control the urge for instant gratification and let Jet figure out how to deliver the goods as economically as possible. For example, prices can drop when a shopper combines multiple orders into a single shipment or is willing to wait for a seller offering a more economical shipping option.
"The bottom line is, we're basically not making a dime on any of the transactions. We're passing it all back to the consumer," Lore says from a conference room in his Montclair headquarters. "We want to build a different type of relationship with the consumer. When we show you a product, it's not because we are making money on it and not because we are closing out a line. It's because we think it's a good deal."