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Jet.com’s Valuation Nears $600M Before Launch
- petercooper 12y agoAnyone remember 'Boo'?
- melling 12y agoI think their backend is built in F#: http://vimeo.com/104896802 http://vimeo.com/104896802
- MichaelGG 12y agoThat's pretty neat. Though I'm not sure it's the best association for F# :/. I wonder if they're using WebSharper.
- melling 12y agoWhat's wrong with the association? If there aren't any technical issues, it shows F# can scale. If the company doesn't succeed, it's not because they couldn't build what the business required.
- deleted 12y ago[deleted]
- austenallred 12y agoSeems like a recipe for disaster. Why not prove something simple out with a few million before dumping $140 million into it? Does what they're building really require that much software to be written before we know if it will work? I get that the founder has been successful, but wow. I'm usually pretty wary when people say "OMG It's 1999/a bubble all over again!" But that is a pretty damn frothy raise, even if you're optimistic.
- ssclafani 12y agoIt's for marketing: > The capital will help fuel Mr. Lore’s grand plans, which include an estimated half-billion-dollar marketing budget and projections for $5 billion in annual transactions by 2020. (From the full WSJ article : http://www.wsj.com/articles/jet-com-raises-140-million-led-by-bain-capital-ventures-1423696950 http://www.wsj.com/articles/jet-com-raises-140-million-led-b...)
- fidotron 12y agoThis is an attempt to generate a self fulfilling prophecy. A new internet marketplace, almost by definition, cannot become viable unless people think it either is already or is a sure bet to become so. Only by trying to persuade us that it's succeeded before launching do they even have a shot.
- sixQuarks 12y agoDespite the highly talented and proven founder, this company has already jumped the shark. Having that much funding and expectations before launch (for this type of venture) is kind of ridiculous. There's going to be unnatural pressures to this business, and I predict it will be a colossal disaster.
- bhouston 12y agoWeird things happen sometimes if you generate enough hype. Oculus VR got bought by Facebook for $2B when its revenues were very small, but highly hyped by nerds.
- sbisker 12y agoSeems like an unfair comparison - Oculus has little revenue and working prototypes of the best VR experience to date. Even disregarding the tech talent, Oculus proved their ability to deliver something interesting that people wanted, however unprofitable that something was.
- josu 12y agoWhat are VCs shooting for here? Even a 10x exit at 6B valuation seems outrageous for a service that doesn't seem that easy to scale.
- deleted 12y ago[deleted]
- prostoalex 12y agoThis is late-stage capital, not VC. Goldman Sachs invested in Facebook at $50 bil valuation, so with later revelation that IPO would happen around $100 bil price point, presumably they were happy about 2x.
- adevine 12y agoBut when FB had a $50 bil valuation, they already had hundreds of millions of users and real revenue. This company has neither. Bad things are bound to happen when capital is coming in at "late stage" pricing to a VC-stage company.
- prostoalex 12y agoIf I had to guess (and this is based on nothing but conjecture), an amount like that for an early stage e-commerce play is to be used for some sort of capital expansion. Perhaps somebody is going to buy up RadioShack stores or Sears leases. Harry's Shaving Products is another one that comes to mind raising this much money early-stage, and they've pumped all nine digits of their round into a German steelmaker. From the large investor perspective this provides some sort of fallback scenario, as worst-case scenario you're left with some commercial real-estate portfolio.
- arfliw 12y agopre-launch late-stage capital #ShitVCsSaidIn1999
- krschultz 12y agoWell, it will be at least interesting to see what happens. They are also potentially the most anti-Lean Startup we have seen in a while, and now that seemingly everyone has accepted Lean Startup as orthodoxy, that might be a unique angle.
- bkjelden 12y agoOne of the main arguments used to distinguish the current tech landscape from the dot-com bubble is that today's companies have real products and real revenues to back up their valuations, whereas many dot-com companies soared to huge valuations without a real product. But Jet.com is a company worth $600M with no product... so where does that leave us in relation to 1999?
- coralreef 12y agoIs it public money (IPO) or private money? This makes a difference.
- ojbyrne 12y agoThe article says "convertible debt" and lists some investors. Google Ventures, Goldman Sachs, etc.
- coralreef 12y agoI know, I was referring to the bubble comments. If private money wants to value a company at a stupid high valuation, thats their prerogative. If it was public money valuing this company, we'd definitely be in a bubble.
- jsprogrammer 12y agoNo product? A mailing list is a product, no?
- prostoalex 12y agoNo launched product. These are the guys who have done it before, so can probably model some numbers. Goldman and Coatue presumably like those models.
- objclxt 12y agoI can think of quite a few examples of people who had "done it before" and went on to have a very disappointing experience. Often, the people who have done it before will fail because they assume the same strategy will result in the same payoff. It is often easy to overlook the importance of luck and chance.
- alfiedotwtf 12y agoThat reminds me, how is color.com going anyway?
- dazmax 12y agoGood question, let me cuil it.
- cflyingdutchman 12y agohttps://twitter.com/peterpham https://twitter.com/peterpham "I thought I was good.."@WSJD: http://Jet.com http://Jet.com hasn't launched yet, but it has already raised $140 million http://www.wsj.com/articles/jet-com-raises-140-million-led-by-bain-capital-ventures-1423696950 http://www.wsj.com/articles/jet-com-raises-140-million-led-b... …"
- akcreek 12y ago> Take advantage of Jet’s audience of millions of loyal shoppers and build a direct relationship with the customers you acquire. I don't understand how companies can make claims like this [1]. Unless I'm missing something this has to be false considering they haven't launched yet and their homepage says 350K people have signed up for early access. I run an online business and a couple of our competitors make false claims very regularly about being #1 (quarterly ranking from the MFG has us at #1 every time). I just can't imagine making a false claim like that - and knowing it is false. [1] https://partner.jet.com/ https://partner.jet.com/
- adamnemecek 12y agoI'm guessing that VCs are betting on the co-founders' previous experience. One of the co-founders also co-founded diapers.com which achieved something like that https://en.wikipedia.org/wiki/Marc_Lore https://en.wikipedia.org/wiki/Marc_Lore
- bhouston 12y agoAnother company with a skyhigh valuation pre-launch is MagicLeap - it is worth something like $1B or so.
- bane 12y agoRelevant and recent. https://news.ycombinator.com/item?id=9031420 https://news.ycombinator.com/item?id=9031420
- en4bz 12y agoWill jet.com be the next pets.com?
- api 12y agoI must have missed something. I thought convertible notes were for seed stage stuff. When did people start raising hundreds of millions with them? Also why, and how, and huh? Edit: 600m valuation, not raised. Face palm. Never mind.
- ericglyman 12y agoIt's senior in the capital structure. For a high dollar risky investment like this, you really want to protect against downside as much as you can -- a convertible note gives them this protection. So if it all goes south, these guys can hold debt (rather than common equity) and get first claim on the assets (ahead of common equity).
- wmf 12y agoAren't later equity rounds usually senior to earlier rounds (the "last money in, first money out" principle) anyway?
- ericglyman 12y agoNo, not unless the later equity round is in a different type of security (preferred equity, convertible debt, etc.). Otherwise, all holders of common equity are considered to be on equal footing (pari passu)
- api 12y agoDon't investors normally get preferred shares?
- ericglyman 12y agoNot unless you agree to sell preferred shares. All up for negotiation.
- dude_abides 12y agoPrivate investors (a handful of rich people) bet on this startup. If their bet succeeds, they become richer, else they will still remain rich. There is no bubble, go home everybody.
- deleted 12y ago[deleted]
- tim333 12y agoI think it's misleading to say it's valued at $600m. What has happened is that the recent investors have invested $140m such that they get 23.3% of the stock it the thing does well. Probably it will end up worth something like $0 if it fails or say $20bn if it succeeds so the investors are hoping $20bn x $probability-of-success x 23.3% > $140m. The headline figure is 600m= 140m/23.3% but I'm not sure that's terribly important. As to whether it's a bubble it depends a bit on your view of $probability-of-success. Dunno about that one.