Amazon to Buy for $540 Million


First shoes, now diapers. Amazon is reportedly about to announce on Monday the acquisition of Quidsi, the New Jersey-based e-commerce company behind,, and, most recently, Fortune's Dan Primack, who broke the story from a maternity ward in Boston where his daughter was just born (no joke), puts the price of the all-cash deal at $540 million. A year ago, Amazon bought online shoe retailer Zappos for $1.2 billion.

Founded by Vinit Bharara and Marc Lore, Quidsi has raised a total of $78.5 million. Its most recent funding was a $20 million debt round last April from investors including Accel, Besssemer, MentorTech, and New Enterprise Associates.

Sponsored Links is the company's flagship brand, with an estimated $300-million revenue run rate this year. just launched in June, and launched last week. So the vast majority of revenues is still coming from, which would value the deal at less than 2X revenues. Feeling threatened, Amazon recently started undercutting on price, a strategy that may have helped convince them to sell.

If the deal goes through, it would just go to show that you can still build an e-commerce startup if you go after the right niche. But it would also prove that if you get big enough, Amazon will notice and either buy you or try to squash you.