Meet Jet CEO Marc Lore, E-Commerce’s Pitchman

Wal-Mart Stores Inc said on Monday it would buy online retailer Jet.com for about $3 billion, the largest-ever deal for an e-commerce startup, as it races to build a Web business to better compete with Amazon.com Inc.

This deal is clearly part of Walmart’s bid to take on Amazon, which now brings in about $100 billion in annual e-commerce sales against Walmart’s roughly $15 billion.

Walmart said that it will also be incorporating some of Jet.com’s “smart” technology that lowers prices in real time by looking for ways to cut costs. But Wal-Mart Stores Inc.’s $3.3 billion acquisition of Jet is the highest amount ever paid for a US e-commerce startup, according to Dow Jones VentureSource, and marks the second time. Walmart and Jet will remain separate brands, the companies said in a release.

Walmart benefitted from the know-how of Allen & Co. and JPMorgan for the purchase, which should be completed this year, after regulatory approval.

In many ways Walmart is the offline version of Amazon, the one-stop shop for everyone from auto parts and baby diapers to groceries and toothpaste.

In its fiscal year ended in January, Wal-Mart had online sales of $13.7 billion, a fraction of its total revenue of $482.1 billion.

“While Jet’s deeply discounted pricing model fits Wal-Mart’s low price strategy we don’t believe that this marriage offers anything truly differentiated or new to the market”, says Dianne Inniss, customer experience and innovation strategist at ThoughtWorks Retail.

Those unfamiliar with the details should know that items from Jet.com are usually sitting 10 to 15 percent lower than those of its competitors.

Some of these acquisitions include Stylr – a mobile app that allows shoppers to locate clothes in nearby stores, Alchemy – a product research company and a leader in e-commerce technology, Yumprint –a recipe discovery and meal planning service provider, and others.

We started Jet with the vision of creating a new shopping experience. Lore, who owns about a quarter of Jet.com, could make as much as $750 million from the deal, on top of “incentive bonuses”, according to Recode. The company has managed to raise hundreds of millions of dollars (about $1.5 billion) from the likes of Alibaba and others.