Alibaba Secretly Invested In Amazon Challenger Jet.com

Chinese e-commerce powerhouse Alibaba Group recently invested in Jet.com, a soon-to-launch online retailer that hopes to challenge Amazon.com AMZN 0%, multiple sources confirmed to FORBES. Alibaba’s previously undisclosed investment came as part of Jet’s $140 million round in February, which was led by Bain Capital Ventures and joined by the likes of Accel Partners, New Enterprise Associates and others. The Montclair, N.J.-based company also raised about $5 million last month in a filing disclosed with the Securities and Exchange Commission. With promises that his company will offer cheaper prices than Amazon for products ranging from sporting goods to toilet paper, Jet’s founder Marc Lore has raised more than $225 million, a stunning amount given that his company has not yet unveiled its e-commerce website. Lore previously created Quidsi, the operator of online commerce sites like Diapers.com, before selling it to Amazon for $550 million in 2010. Lore declined to comment on Alibaba’s investment in his company. Alibaba also declined to comment. Alibaba’s investment in Jet gives it a piece of perhaps the most ambitious challenger to Amazon in years. Alibaba has a track record of investing in U.S.-based startups–among them ride-hailing service Lyft, online-shopping service ShopRunner and photo-messaging app Snapchat. It also launched online marketplace 11 Main in June, though that site has since received a tepid reception among American consumers. Those familiar with Alibaba’s investment strategy, which is led in the U.S. by former Liberty Media LMCA +0.62% executive Michael Zeisser, said that its backing of American companies gives it a direct window to Silicon Valley trends. Investments also allow it to develop easier partnerships with U.S. startups, among them a relationship with ShopRunner that allows American brands to sell directly to Chinese consumers. Following it’s $140 million round in February, Lore told FORBES that he didn’t “have any more plans to raise more capital.” “We’re using this money to invest in the value proposition to the customer,” he said in February. “It’s more dollars to invest across the board from product to market to infrastructure and operations.” In the past, Lore was quoted as saying that Jet would have to raise up to $600 million to develop a worthy challenge to Amazon, though he said more recently that those figures were taken out of context. “In order to build a really big business in e-commerce you’re going to need a lot of capital, but there’s no set amount of money,” said Lore. “If you think about it, Amazon early on in its existence raised $1 billion.” http://perfectbrandsng.com/alibaba-secretly-invested-in-amazon-challenger-jet-com/