This Startup Got Bought in Reportedly Biggest Ecommerce Deal Ever
The deal supposedly beat out Walmart's purchase of Jet.com
Walmart has nothing on PetSmart, well, at least when it comes to acquisitions. In what is lauded as the biggest ecommerce acquisition ever, the pet retailer has snapped up competitor Chewy.com for $3.35 billion, beating out Walmart's purchase of Jet.com for $3.3 billion, according to Recode. (When reached for comment, PR reps told This Dog's Life, "We are not commenting on the transaction beyond what's in the release and fact sheets.")
The move comes after Chewy has seen a fast trajectory since its launch in 2011. Looking to take on the big guns, like PetSmart, Chewy focused extensively on its customer experience by offering fast shipping, no-fuss returns and discounts to first-time customers and loyalists. The company reportedly raked in $900 million last year, with it on track to bring in $1.5 billion this year.
"Retailer and e-commerce is all about execution. The barriers to entry are pretty low," Chewy CEO Ryan Cohen told Bloomberg last year. "We obsess over of customers and we know the products better than any other pet store."
It also has 43 percent of the online sales for pet food and litter in the U.S, behind first-place Amazon's 48 percent, according to market research firm 1010data.
"Chewy's high-touch customer e-commerce service model and culture centered around a love of pets is the ideal complement to PetSmart's store footprint and diverse offerings," Michael Massey, the CEO of PetSmart, said in the press release announcing the acquisition. "Together, PetSmart and Chewy will provide the most convenient customer experience to a wider base of pet parents across every channel."
Taken private in 2014 for $8.7 billion, PetSmart is taking a big risk on Chewy, a company that is still not profitable.
The two companies will "operate largely as an independent subsidiary," according to the press release.
Entrepreneur Editors' Picks
How an Encounter With the 'Armpit of Destiny' Helped the Founder of Grubhub Take His Business From His Apartment to a $2 Billion IPO
You Can Train Your Brain to React to Stressful Situations Better. Here's the 3-Step Process.
A Disastrous Valentine's Day Inspired This Founder to Launch Her Own Floral Brand. It Became a Celebrity Magnet With Retail Revenue Up 450% Since 2019.
What Is Your Dream Job? Ask Yourself These 4 Questions to Find Out.
This Is the Crazy Process This Juice Franchise Went Through to Get USDA-Certified Organic. But It Sure Has Paid Off.
No One Would Rent Me a Café in Trendy NYC Neighborhoods, So I Tried Something Risky. Now I Have 3 Coffee Shops.