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Amazon Challenger Jet.com Acquires Online Home Retailer Hayneedle

This article is more than 8 years old.

Jet.com, an online retail startup challenging Amazon, is doing a little shopping of its own. On Monday, the company announced that it had made its first acquisition with the purchase of Omaha-based Hayneedle, a home goods e-commerce company.

Terms of the deal were not disclosed.

Jet, which has raised more than $700 million and was valued at $1.5 billion as of a recent round of funding, is in an uphill battle to gain traction in an online retail market that is already dominated by Amazon. In purchasing Hayneedle, it obtains a site that offers patio furniture and pet supplies that reportedly does more than $350 million in annual sales.

Marc Lore, Jet's founder and CEO, said he had not planned to make any acquisitions to grow his company. In an interview with FORBES, he called the move "opportunistic" and added that Hayneedle had cracked a niche market in its more than 10 years of operation.

"We think that mass merchants in general have a hard time in this high margin, long tail category called 'home,'" he said. "It gives Jet an amazing boost in that category."

Jet, which has dabbled in home goods with some 800,000 current products, will add "a couple million" to its site with the addition of Hayneedle. Jet will also obtain Hayneedle's customer support center fulfillment warehouses in California and Ohio. The Omaha World-Hearld reported earlier that Hayneedle will operate as a subsidiary of Jet and that the company's 500 or so employees would keep their jobs.

Hayneedle began in 2002 originally as Hammocks.com before cofounders Doug Nielsen, Julie Mahloch and Mark Hasebroock began opening more niche home goods web shops. It raised funding in 2006 from Sequoia Capital before consolidating hundreds of sites into Hayneedle.com. 

Amazon has yet to crack the home market, where large, bulky items present logistics and shipping challenges. That has left opportunity for companies like Boston-based Wayfair and Hayneedle, which Lore said will grow under Jet through continued investment.

According to Lore, Jet ended 2015 on track to transact $500 million in goods on an annualized basis. Jet's CEO said he has no more plans for future acquisitions and added that the company's first quarter results in 2016 are on track to beat final three months of 2015.

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