Walmart will pay about $3.3 billion in cash and stock for Jet.com, the largest acquisition of a U.S. e-commerce startup and the retailer’s most forceful acknowledgment yet that its enormous store network has not translated into comparable strength online.

The companies announced Monday that Walmart will provide roughly $3 billion in cash, some paid over time, plus $300 million in Walmart shares. The definitive agreement would bring Jet’s pricing technology, urban customer base and founder Marc Lore into the world’s largest retailer, while allowing Jet.com and Walmart.com to continue operating as separate brands.

For Walmart, the purchase is less about the current size of Jet than the speed and expertise the young company may add. Jet launched publicly only last year. Its system adjusts prices according to basket size, fulfillment location and customers’ willingness to waive returns or use lower-cost payment methods. Walmart is buying a mechanism designed to make online orders more economical, as well as a management team built around internet retail.

A $3.3 billion bid to close a digital gap

Walmart remains unmatched in physical scale, with more than 11,000 stores worldwide, but its online business trails Amazon by a wide margin. The Wall Street Journal reported that Walmart generated nearly $14 billion in e-commerce sales last year, about 3 percent of its $482 billion in annual revenue, while Amazon posted $107 billion in sales.

The disparity has persisted even as Walmart spent heavily on distribution centers, mobile applications and its website. Online sales growth slowed sharply in recent quarters, increasing pressure on Chief Executive Doug McMillon to find a faster path. The acquisition, disclosed to investors in an August 8 securities filing, makes clear that Walmart is willing to buy capabilities it has struggled to build quickly enough.

“We’re looking for ways to lower prices, broaden our assortment and offer the simplest, easiest shopping experience,” McMillon said in the company’s announcement. Lore, who previously founded Quidsi and sold it to Amazon, is expected to lead Walmart’s U.S. e-commerce operations after the transaction closes. His arrival gives Walmart an executive with experience scaling internet retail and competing directly with Amazon.

Jet’s algorithm meets Walmart’s supply chain

Jet’s central idea is that online prices should reflect the actual cost of fulfilling a basket. A customer who chooses products stored close together, buys more at once or accepts slower service can receive a lower price. The technology attempts to expose logistics savings to shoppers rather than simply promising a fixed membership benefit.

Walmart brings assets Jet cannot easily reproduce: thousands of stores near American households, large purchasing volumes, established supplier relationships and a growing network of dedicated e-commerce fulfillment centers. The strategic case is that Jet’s software and younger, more urban customer base can be combined with Walmart’s inventory and distribution muscle.

Reuters described the transaction as the largest-ever deal for an e-commerce startup and a direct attempt to sharpen competition with Amazon. Yet the price also highlights the cost of that effort. Jet is expanding rapidly but remains unprofitable, having relied on discounts and marketing to acquire customers in a category where shipping and returns can consume thin margins.

Buying growth, talent and time

The purchase price is striking for a business founded in 2014. Investors including New Enterprise Associates, Accel Partners, Alibaba and Fidelity had supplied Jet with substantial capital on the expectation that it could become a major alternative to Amazon. Walmart is effectively paying for potential: software, shoppers, supplier relationships and a management team that might accelerate its own transformation.

The Guardian reported that the total consideration makes Jet one of the richest exits in the short history of online retail startups. The deal will also test whether entrepreneurial speed can survive inside a company with more than two million employees, vast legacy systems and a culture shaped by store operations.

Walmart says Jet will retain its brand, an arrangement intended to preserve its appeal to customers who might not shop at Walmart.com. That creates a two-brand strategy: Walmart can emphasize everyday low prices and broad mass-market reach, while Jet targets a more affluent urban audience. Shared sourcing, fulfillment and technology could reduce costs behind the scenes without making the sites identical.

Amazon remains the benchmark

The acquisition does not erase Amazon’s advantages. Amazon has a deeply entrenched Prime membership program, a large marketplace of third-party sellers, sophisticated cloud infrastructure and years of data on online shopping behavior. Wired’s analysis placed Amazon’s online retail sales far above Walmart’s and argued that the deal is more immediately a contest for a stronger second position than a sudden challenge for leadership.

Walmart, however, can use stores as pickup points and local distribution nodes—an advantage that becomes more valuable if its websites can predict demand, route orders efficiently and persuade customers to consolidate purchases. Jet’s pricing engine is designed around exactly those logistics questions.

The transaction requires regulatory approval and is expected to close this calendar year. The companies have not promised immediate savings or set a timetable for integrating technology. Investors will instead watch the indicators that have frustrated Walmart: online traffic, repeat purchases, assortment, fulfillment expense and sales growth.

By choosing acquisition over another incremental rebuild, Walmart has made the stakes unusually clear. The company is spending $3.3 billion not merely to own a promising website, but to buy time in a retail shift that is moving faster than its digital business. Whether Jet can provide that acceleration will depend on Walmart’s ability to combine startup software with a supply chain built for stores—and to do so without losing the qualities that made Jet attractive in the first place.