At the moment Amazon pretty much dominates online shopping—at least in America—but that wasn’t always the case. Back in 2010 the e-commerce giant bullied Diapers.com, a rival website focused on selling baby-related products, into accepting a $540 million buyout. Now Marc Lore, who co-founded Diapers.com along with a family of online stores, is gearing up to launch a new Amazon competitor called Jet. Lore’s site will take a new approach, basing its prices off the distance between a particular product and the person who wants to buy it. That means some purchases could arrive extremely quickly for a low price, while other could take longer and cost a bit more.
Marc Lore, who co-founded Diapers.com-parent Quidsi and sold it to Amazon.com AMZN +1.19% for about $550 million in 2010, is putting together another e-commerce site and is set to announce fresh funding on Tuesday. The new company, known as Jet.com, has raised $20 million from Western Technology Investment, a Portola Valley, Calif., debt-financing firm that backed Facebook FB +1.97%and Google GOOGL +1.23%, as well as $5 million from Silicon Valley Bank, said Lore. Jet had previously raised $55 million from New Enterprise Associates, Accel Partners, Bain Capital and MentorTech Ventures. Lore declined to give specifics, but Jet has been telling potential partners that it will distinguish itself from Amazon, eBay EBAY +1.28% and others by pricing products based in part on their proximity to the buyer. That way, customers could potentially get their merchandise quicker and at lower cost. According to a description on New Enterprise Associates’ website, Jet will have a membership component and offer “lower prices than any other online retailer.” In a blog item he plans to post Tuesday, Lore asks, “What are the hidden costs in e-commerce? Are there aspects of e-commerce that don’t make sense? And most importantly, how do we expose these inefficiencies and empower customers to eliminate them?”