Petsmart bought Chewy.com in what's reported to be the biggest e-commerce deal ever
Petsmart just snapped up pet supply site Chewy.com in what's reported to be the biggest e-commerce deal in history.
The big box store paid around $3.35 billion for the online outlet, according to Recode's sources — slightly more than the $3.3 billion Walmart spent on Jet.com in another monster online shopping acquisition last year.
The deal is also all the more notable for the fact that Petsmart itself was most recently valued at $8.7 billion when private equity investors bought it two years ago. The brick-and-mortar retailer is clearly betting big on the fast-growing site.
Despite a relatively low profile, Chewy.com has become of the country's largest and fastest growing privately owned e-commerce companies since its inception in 2011. The site pulled in nearly $900 million in revenue last year and claims to be on track for $1.5 billion this year.
As of January, the site controlled 43 percent of the online pet market — not far behind Amazon's 48 percent, according to data cited by Forbes.
Chewy CEO Ryan Cohen, who founded the Ft. Lauderdale, Florida company with inspiration from his poodle, will keep his post after the deal closes.
Petsmart is among the country's biggest traditional pet chains with more than 1,500 stores.
The sale comes as brick-and-mortar retailers increasingly struggle to adapt to changing consumer habits — namely a migration to online stores like Amazon.
The chain's willingness to shell out a sum that amounts to more than a third of its own value suggests that it's ready to dive headlong into that future.
