Way back in 2010, Marc Lore struck a deal worth more than half a billion dollars to sell Quidsi – the company behind Diapers.com and Soap.com – to Amazon. The blowout acquisition helped Amazon turn into “the everything shop‘, but twelve years later, Lore described the sale as ‘disturbing’.
“We were sold out,” Lore — who co-founded both Quidsi.com and Jet.com — told Disrupt 2022.
“With Walmart, we were happy to sell; we saw that as a way to accelerate our vision,” the billionaire of the 2016 sale of Jet.com told Walmart. The “Amazon situation was different. It was a forced situation. We didn’t want to sell,” Lore said onstage in conversation with australiabusinessblog.com’s Ingrid Lunden.
To keep up with the competition, Amazon has “cut the price of diapers by 30%, right? That’s unheard of,” Lore recalls. But despite mounting pressure, the former Quidsi executive claimed his now-defunct company ” still growing well.” Lore claimed this was one of the reasons Amazon finally decided to pick up the brand.
But before then, Lore believed Quidsi needed to raise at least $100 million more to adequately challenge Amazon — a particularly hefty sum at the time. Only, he couldn’t secure it. (In total, Quidsi has raised approximately $79 million in equity and debt from investors including Accel, Bessemer Venture Partners and Pinnacle Ventures.)
“That would have been necessary to feel like we had enough capital to actually do it,” Lore said. “And yes, the investors were deterred by Amazon’s attack.”
In a side note, Lore claimed Quidsi also had “an offer from another company” for “some $100 million more,” but the co-founder puzzlingly declined to share additional details.
A day after the Amazon-Quidsi transaction closed, Lore said he and others from the company went to a bar, “drinking our tears away” about “how shocking it was, because we sold out.”
“We were building something really special,” Lore added, citing Wag.com and other sites under the now-extinct Quidsi umbrella. In the co-founder’s view, Quidsi’s customer experience at the time was “a lot better than you’d find on Amazon or anywhere else.”
But $100 million “was a lot of money back then,” and Lore concluded, “People were just scared of Amazon.”