A tweet published on November 25 reads: “wait. so @Jet charges $10 more for cheese balls and raises a half a billion? well bravo on that one”. The witty tweet articulates, albeit cynically, what watchers of Jet have been wondering since the company's launch in late 2013. The company’s ability to disguise its questionable business model changes under the banner of “still profitable by 2020” or a completion of a major investment round, is uncanny.
Jet is notorious for being loud, and it doesn’t disappoint with its most recent investment round, raising a fresh $350 million with “verbal agreements” for an additional $150 million in the near future. Verbal agreement? Yes, you read right. One cannot help but raise an eyebrow when a company is making verbal agreements, rather than an actual one.
Let's look at the round in context. In February this year, the company locked in $140 million. At the time, the company was valued at $600 million. Yet the company itself reported that it was worth $1 billion before capital infusion, implicating that the company is now worth an estimated $1.35 billion to its investors. That is one heck of a jump.
So is Jet blustering without strong backing? It is an important question, and a difficult one to answer. If Jet is “all-talk”, there would be worse evidence to show for it. But the recent round of investment shows that investors are still taking a bet, and a large one at that.