Walmart (NYSE:WMT) is in talks to buy online retailer Jet.com, people familiar with the matter told The Wall Street Journal.
The addition of Jet would strengthen Walmart's e-commerce business and add an algorithm that prices orders based on availability and proximity to the shopper.
Jet is headed by Marc Lore, founder of Quidsi and Diapers.com, which was ultimately sold to Amazon in 2010 for roughly $550 million.
Lore has managed to raise more than $500 million in capital from venture firms, and one estimate put Jet's value at roughly $1 billion. The goal is to be profitable by 2020, Lore told Shoptalk attendees in May.
But Jet could be valued at up to $3 billion in private markets, according to the report.
Jet is a little more than a year old, having launched in May 2015, but has been adding roughly 400,000 new "member" customers each month with "good repeat rates," said Lore. At the end of its first year, Jet reported it had sold about $1 billion worth of goods to more than 4 million customers.
While Jet is a competitor to Amazon, albeit a small one, it likely has technology that is very attractive to Walmart. In addition to the algorithm, Jet has invested in building a universal catalog that lets marketplace members more accurately match uploaded SKUs to product descriptions, with a focus on the home and consumables categories.
Jet has also built a virtual reality experience used internally by remote employees. Walmart recently introduced new store communication systems to help management and associates better communicate throughout its network, increase efficiency and reduce costs.
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