Weekly Update #160: Analyzing the $3.3B Walmart-Jet.com Acquisition

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Hello Investors,
Walmart acquires Jet.com for $3.3 billion
Jet.com was founded by Diapers.com founder Marc Lore (which sold to Amazon for $545 million in 2010). The company had a goal of undercutting Amazon and other large online retailers (like Wal-mart), and had so far delivered on its promise of being a growth machine. In less than 18 months, Jet.com was selling over $80 million in goods a month on its website. The company had raised over $500 million in venture funding in less than two years two fund its aggressive expansion.

It's rare for such an early-stage startup to get acquired for so much money. But given the recent valuation ($1.35B in November 2015), the returns for all investors are nothing to scoff at.
With the acquisition, Walmart gets some great e-commerce technology (and talent) to help it compete with Amazon in the online space. Marc Lore will stay on the Walmart team and lead its e-commerce division.

One interesting part of this acquisition will be its impact on the employees of Jet.com, who were likely paid handsomely in stock options. Given that the company is less than two years old, most of the employees' stock options have not fully vested. In some cases, these unvested stock options will still get paid in full cash from the acquirer. In other cases, they will convert to shares of Walmart stock and continue to vest. And in the most unfriendly scenario, unvested options will lose their value entirely. 
Phil Haslett | Founder + Head of Investments | EquityZen 

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