They've actually done very well with "hype" as it were. I guess this goes to show that you too can spend tons of VC dollars, make yourself "popular" and never make any money, but the popularity is enough to make you worth money, even though you're losing money. Fascinating. I almost wonder if they should sell now, just in case they run out of VC "at some point in the near future" and stuff hits the fan...or maybe they'll be "worth" far more in the future, hard to tell...
I'd be careful about drawing too many conclusions from this story. For one thing, you are not Marc Lore. With a successful Amazon sale under his belt, he certainly had a leg up on fundraising over almost anyone. His name alone helped to generate buzz.
But even being Marc Lore is enough. I worked for his cofounder from diapers.com and you've probably never even heard of that company—building hype requires a compelling narrative, not just a big name.
This has worked with chat apps and other kinds of community-based social networks for ages, where the promise that after you've grown large, you'll figure out a way to monetize later.
What's remarkable is Jet was able to pull this off by being in meatspace, by acting as a VC-subsidized arbitrage broker for consumer products, hoping to get enough mindshare to be considered more of a threat than a nuisance so it can get bought out. It worked!
It's just a misunderstanding of what the acquiring company is actually buying. When a company acquires a startup, they're doing it so they can get control over that startup's users. They really don't care about the technical or financial details, they just want authority over those millions of eyeballs.
I'd love to see their return customer number. If you hand out money, user acquisition if measured by signups is pretty meaningless.
I tried this site once and it was a disastrous experience. Their customer service is horrendous, and the complete opposite of Amazon. After that purchase it became pretty clear to me that Amazon has nothing to worry about.
This reminds me, I have around $100 in credits from 1 failed order because they messed up multiple times. Would be awesome if they sold Amazon gift cards.
That led to a ton of funding which allowed for extremely aggressive marketing and customer acquisition, not to mention plenty of media coverage.
If anyone can battle Amazon, it's probably Jet. I can see why Walmart would want Jet (and Marc) in their camp.