Lack Of VC Funding Has Made Startups Easier Targets For Larger Buyers
E-commerce startup Jet.com’s decision to sell to Walmart for $3.3B marks the third startup in the past few weeks that has been bought out.
With venture capitalists growing pickier in their investments, and initial public offerings slowing, rapidly growing startups are becoming the perfect targets for larger corporations with similar ambitions.
In Jet.com’s case, the one-year-old company sought to take on Amazon.com, similar to Walmart. The deal provides Walmart added ammunition to give Amazon.com a run for its money, as the brick-and-mortar leader has been working to build its online presence, even boosting its distribution centers throughout the country.
Uber’s sale of its Chinese business to competitor Didi Chuxing after losing nearly $1B in one year is another example. Uber China, like Jet, had worked to appeal to customers, building operations that buyers thought strategic—but it had yet to prove profitable, the Wall Street Journal reports. Still, other startups have had it worse—raising money through VC only to have workers laid off, valuations lowered or even having to fold. [WSJ]
