Jet lands $350M with another $150M on the way

Amazon competitor Jet.com has raised a gargantuan new round of funding, giving the company a valuation of $1.5 billion.

Today, Jet announced the close of a $350 million raise from Fidelity, Alibaba, Bain Capital, and Google Ventures. The company is also in the process of raising another $150 million. When the next round closes, Jet will have raised $720 million in total.

Jet.com was started in 2014 by Diapers.com founder Marc Lore, who famously sold the ecommerce company to Amazon for $540 million, in 2010.

Now, Lore is taking on Amazon again with another ecommerce venture. Jet.com is a bargain marketplace that delivers bigger discounts to customers the more merchandise they buy. It’s styled after Costco, which gives members discounts when they buy items in bulk. Like Amazon, Jet has its own network of warehouses from which it ships millions of items.

When Jet launched over the summer, it offered deep discounts on a variety of items in exchange for a $50 annual fee. The company has since killed the $50 fee and is making its low-cost goods available to all. It says it has amassed a million registered users, and recently offered outsiders a glimpse into its sales. In the month of October, Jet sold $33.2 million worth of goods — an apparent 65 percent increase from September.

The company has been criticized for burning too much money. As an example, Jet launched a $100 million ad campaign that included videos and large billboard takeovers. But there is a big opportunity if Jet is able to convince customers to use its platform.

Right now, ecommerce makes up a small percentage of overall retail sales in the U.S. But that number has been growing quickly. If Jet can capture the hearts and wallets of consumers now, it has a chance of being in place as one of the go-to marketplaces when digital commerce takes off.