Amazon rival jet.com is close to closing a new round of funding that will give the firm a valuation of $1.5bn, half the value the Wall Street Journal reported it was discussing raising money at in July.
Fidelity Investments is set to pour $100m into the shopping startup, Fortune reported, as part of round that will ultimately worth around $500m. The round could reach as much as $550m, with indications that the firm is running low on cash.
Previous funding rounds have included names such as Bain Capital Investment, Silicon Valley Bank, and Goldman Sachs.
Jet.com was founded by Marc Lore, who sold his first e-commerce startup Quidsi to Amazon. This new firm has been attracting a lot of hype in recent times.
Lore makes no secret of who his new company’s target is. Jet.com lists Amazon prices on every item, promising to beat Amazon pricing by 10%-15%. It has developed technology that alters the price of products, depending on what is put in shopping cars.
The firm though does not expect to become profitable until 2020, when it forecasts it will have 15m customers generating $20bn in sales. It had $1bn worth of sales on its first day of trading in July. It recently dropped its membership fee business model.
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