Jungle.com, one of the UK's best known e-commerce firms, has been sold to Great Universal Stores for £37m - a fraction of its earlier valuation.
Steve Bennett, the founder and chief executive of Jungle, which sells items including electronic equipment, compact discs and videos, is expected to make around £7m from the sale of the company he launched on the internet last August.
Earlier this year, he had hoped to float the group with a valuation of up to £750m, with his personal stake valued at up to £250m.
However, the plunge in the value of technology shares in March dashed hopes of a stock market listing and forced the group to scale down its offer price to prospective buyers. It is understood the company attracted potential interest only after the price had fallen below £40m.
GUS, which owns the Argos chain, is believed to have faced strong competition for jungle.com from rival groups Dixons and Kingfisher.
The £37m deal, which includes the repayment of around £12m of debt, will tie Mr Bennett to the company for the next four years.
He said: "GUS give jungle.com the muscle to take us to the next stage in our growth. Of the many offers we had for the business, GUS was by far the best fit."
John Peace, chief executive of GUS, said: "There is a strong strategic fit between these two businesses. GUS will be able to offer its customers a wide range of computer and office products via the most convenient channel, be it ordering via store, catalogue or internet."
Despite being the UK's second most recognised e-tailer, behind Amazon, jungle.com lost £11.4m in the 12 months to July 31, on the back of heavy marketing and development costs.
A high-profile advertising campaign turned Jungle into one of the most visible e-commerce brands in Britain, making the valuation slump all the more surprising.
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