Jet.com was once touted as a sure bet to take on Amazon’s marketplace.
Now, however, things at Jet are a bit more turbulent as the online marketplace is reportedly running low on cash.
The Wall Street Journal reported that Jet is currently in the process of closing a $550 million round of funding to ensure that the company has enough cash on hand to continue operating into 2016. According to a Jet financial plan reviewed by The WSJ, the online retailer estimated that it would have about $63 million in capital at the end of October. However, with $76 million in expenses already lined up in November and December, something had to be done to keep the company afloat into the new year.
Assuming that Jet successfully closes the still ongoing round of funding, The WSJ pegged the retailer’s valuation at $1.55 billion. Fidelity Investments has reportedly been linked to a $90 million investment that would constitute the highest single contribution of the round.
It’s unclear whether this is merely a blip on Jet’s radar or an indication of something bigger, but there’s no doubt that the “Amazon killer” has encountered some issues since launching in July. Only three months after going to market, Jet scrapped its membership fees, thereby doing away with its one guaranteed source of revenue.
If Jet does not manage to secure at least $500 million in funding, it may have to revisit some high-minded plans for 2016, such as an aggressive expansion plans that include hiring more than 1,000 additional employees. However, in the marathon against Amazon, Jet may not be able to afford even one step back this early in the race for consumers’ digital wallets.
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