Phillip Moorman
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While the goal of any e-commerce venture is to turn a profit, oftentimes investors will settle for a huge payday when, or more likely if, they’re bought out. This shouldn’t be the end goal until it’s time.

If your e-commerce site doesn’t realize its full potential, potential buyers will hesitate to see if you’ve already reached the crest and you’re plateauing.

The key is to exit the field when you’re as close to the marketplace zenith as possible.

A couple years ago, e-commerce sites were getting bought for a lot less than earlier valuations. The online marketplace wasn’t as attractive despite the explosion of mobile phones, which substantially grew the online marketplace.

For example, Gilt sold to Hudson’s Bay Co. for a quarter of its $1 billion valuation; One Kings Lane, a home goods site that was also valued at a billion dollars sold to Bed Bath and Beyond for under $100 million.

But the measly payouts didn’t last …

In fact, the two biggest e-commerce store exits of the last decade happened within the last two years. Here are the top five private e-commerce exits  over the last decade:

1) Chewy.com Bought By PetSmart for $3.35 Billion (2017)

In 2015, private equity investors purchased PetSmart when it was valued at $8.7 billion. That’s what makes the purchase of Chewy.com in 2017 so dangerous.

Not only was it the largest e-commerce acquisition in history, but PetSmart was making a huge gamble with the purchase. They were betting almost its entire business on the e-commerce site, opening themselves up to a lot of risk if the purchase didn’t work quickly enough.

Sure enough, PetSmart’s eyes were bigger than its stomach. They’ve had to transfer a third of Chewy.com’s equity to PE company BC Partners to avoid a portion of bondholders who financed the original purchase.

The move mirrors asset transfers by retailers in similar trouble, like J. Crew Group Inc. and Claire’s Stores Inc. While this was a huge windfall for Chewy.com, which was started in 2011 and saw profits of $900 just five years later, it’s unclear whether it’ll ever work out for PetSmart.

2) Jet.com Bought By Walmart for $3.3 Billion (2016)

Unlike the top e-commerce exit in history, Jet, despite going for $3.3 billion, was purchased by Walmart, which paid for it not in bonds, but cash and stock.

The move by Walmart was an attempt to compete against Amazon.

They had been struggling to keep up with the Jeff Bezos behemoth, and saw the purchase as a way to do just that in the online space. Walmart was also looking to buy the brain behind the e-commerce company, founder Marc Lore.

In fact, Jet’s success as an e-commerce startup shouldn’t come as a surprise …

Lore sold Quidsi to Amazon for $545 million in 2010 before moving to start Jet a couple years later. Some people just have a knack for the big exit.

3) Zappos.com Bought By Amazon for $1.13 Billion (2009)

This one barely squeezes onto the list because it happened just within the 10-year window, but at the time it was the biggest on record and a coup for the online shoe retailer—still based in Henderson, Nevada—that had started a decade earlier as Shoesite.com.

The cost for Zappos.com was 10 million shares of Amazon stock, and $40 million in cash and restricted stock for the Zappos employees. As part of the deal, and like a few on this list, the management team would retain control from their base just outside Vegas.

That 10 million in stock was initially valued between $850 and $900 million, but when the deal—which was initially announced in the summer of 2009—finally completed in November, it was valued at over $1.1 billion.

4) Avito Bought By Naspers for $1.08 Billion (2015)

The South African conglomerate Naspers purchased Russia-based Avito when it was already the world’s third-largest classifieds site and the third-largest internet company in all of Russia.

Naspers did so by increasing it’s pre-existing 17.4 percent ownership portion to a majority 67.9 by acquiring shares with existing investors.

Because the Russian economy fell into a recession, the move by Naspers was a success.

The economic crisis in the region meant many in Eastern Europe were purchasing second-hand clothing and used cars to save money. The site itself, Avito.ru, saw a 55 percent increase in sales after the purchase, maximizing the return on the deal.

5) Lazada Group Bought By Alibaba for $1 Billion (2015)

Lazada is a private Southeast Asian e-commerce company founded in 2012 by Rocket Internet (a German-based internet company).

When it launched in 2012, the goal was to sell inventory directly to customers from its own warehouses, thereby eliminating the middleman.

It was a smashing success.

A year after it was up and running, a marketplace model allowed third-party retailers to get in on the operations and sell through their marketplace. A year after that and the new marketplace already accounted for over 60 percent of its sales.

In one more year, the Alibaba Group purchased a majority stake in the company to help expand into Southeast Asia. Last year, Alibaba poured another billion into the company to continue its expansion plans.

Alibaba invested a lot more wisely than PetSmart, that’s for sure, but only because they were already big enough to survive its failure.

Same with Amazon, Walmart, Naspers and the last big company on this list.

6) Dollar Shave Club Bought By Unilever for $1 Billion (2016)

Never underestimate your customers because that’s how Dollar Shave Club went from a gripe at a party between co-founders Mark Levine and Mike Dubin about the cost of razors, to a $1 billion windfall half a decade later.

They recognized the market for cheap, monthly razors, rather than the $20 or $30 men normally spend at convenience stores. And when a product they sold turned out to be a bust, pissing off their customers, they refunded the full cost for the 64,000 people who had purchased it.

Unilever approached Dollar Shave Club in 2015 about the purchase, and six months from the first dinner, the deal was struck for $1 billion in cash. The founder and CEO, Dubin, remained in that role and Dollar Shave Club is operated as an independent entity owned by Unilever.

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