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USA Today reports this morning that e-commerce startup Jet has gotten $350 million in new investment capital, with promises of another $150 million, "which would bring its fundraising total to $770 million." Among the investors were mutual fund Fidelity, Bain Capital, Alibaba, and Google Ventures.

The story notes that " launched in July promising Amazon-beating prices to those willing to shop for multiple items at a time. It had initially anchored its business model to an annual $50 membership fee, but in October scrapped the charge and its plan to offer even deeper discounts on more than a million household items ... reports that sales in September were $33.2 million, a 65% jump over the previous month. The company anticipates closing out 2015 at an annualized run-rate of more than $500 million in sales."

The Jet model depends on a series of algorithms that purport to give consumers the ability to drive down prices by making choices - more items and slower delivery, for example, will drive down the order costs, with the entire process transparent to the shopper. Jet, which was founded by Marc Lore, who created Quidsi and then sold it to Amazon before eventually going back out on his own, also depends on consumers preferring this construct rather than Amazon's fee-based discount model that is built around Amazon Prime.
KC's View:
This new money certainly gives Jet a little bit of breathing room as it continues what essentially is a race - it has to generate enough traffic to justify the discounts it is giving on products, discounts that now are being underwritten by investment money. It is all about burn rate ... and as I say, it is a race.

I've ordered from Jet, and while the prices were okay and the fulfillment on schedule, the experience was less branded than what I'm used to with Amazon. In the end, I think that will be one of Jet's real challenges ... creating the kind of community of users that Amazon has so successfully developed.