Pure-play e-retail newcomer Jet.com Wednesday announced the initial closing of $350 million in new funding, with an additional $150 million expected shortly.
In addition to that $500 million, $130 million convertible financing from February will convert into Series B equity, bringing the expected Series B equity round to $630 million.
The funding values Jet at $1.5 billion four months after its July launch. The round was led by Fidelity, and includes Series A Jet investors Bain Capital, Alibaba, and Google Ventures.
Just four months after its launch, newcomer Jet has had some growing pains. And it’s also had some money.
“The last four months have been incredible and we’re thrilled with the response we’ve seen from both our members and retail partners,” founder-CEO Marc Lore said in a statement.
The retailer has already abandoned its much-touted membership model in favor of inching up prices on items anyone can buy. Studies have shown that its low-price promises have largely been met, aided by its dynamic-pricing model where shoppers can opt for slower shipping and other factors that bring their final prices down.
In addition to that major change to its model in October, the retailer has had to contend with confusion on the part of consumers and complaints from brands and retailers over its low pricing. While many refer to the newcomer as an “Amazon rival,” some observers have told Retail Dive that’s not really where its ambitions really lie.
“If you take Jet’s comments at face value, I don’t know if they have a strong ambition to convert a lot of shoppers from Amazon to Jet,” Profitero VP of strategy and insights Keith Anderson told Retail Dive earlier this year. “They seem to be trying to convert new shoppers to be online shoppers, which I find to be a risky gamble. They’re interested in the household that values money more than time …it’s such a precise segment of shoppers that they hope exists.”
Long term Jet has yet to prove itself, but its investors appear to have faith.