Faire, an online wholesale marketplace for small independent retailers, has soared to a valuation of US$7 billion on its latest funding round of US$260 million, the company's CEO announced today.
Just last October, Faire was valued at US$2.5 billion following a Series E raise of US$170 million. It first became a unicorn – a privately owned company valued at $1 billion or more — in 2019 with a Series D raise of US$150 million.
Faire was launched simultaneously in Waterloo Region and San Francisco in 2017 under the original name Indigo Fair.
In an interview today with Tech News, co-founder and CTO Marcelo Cortes said Faire is continuing to expand its Canadian operations and will be moving its local workforce – 165 and growing – into 60,000 square feet of space in the former Shopify building at 85 Willis Way in uptown Waterloo.
“We have the whole second and third floor,” said Cortes. “We’re very excited.”
Shopify, another hugely successful Canadian online retail services company, announced last year that most of its staff will continue to work remotely even after COVID-19 restrictions have been lifted.
Cortes said that Faire is still finalizing its return-to-office plans and can’t say yet when it will begin to move into its new Waterloo office space.
A graduate of the University of Waterloo’s computer science program, Cortes said he and his co-founders intentionally structured Faire from the start to have joint headquarters in Waterloo Region and San Francisco. The co-founders met while working for mobile-payments startup Square, with Cortes in the Waterloo office and Max Rhodes and Daniele Perito in Square’s San Francisco office. The arrangement worked well, so they decided to keep the bi-national structure when they started Faire.
“We have always been committed to Waterloo from day zero,” said Cortes. “We're a Canadian company just as much as we are a U.S. company, and eventually we're going to become a global company.”
He said Faire plans to keep hiring in Waterloo, but it has also begun looking for a Toronto location as well.
“If we could hire everybody here (in Waterloo), we would,” he said. “But I think at the rates that we're growing we need to expand a little bit and that's why we are also hiring in Toronto now.”
Faire’s customers are small retail shops – gift stores, specialty stores and the like – as well as the makers, or brands, that supply these small retailers with products.
Faire’s algorithms curate product suggestions. The company is so confident of its ability to identify what sells that it allows unsold inventory to be returned, removing a store owner’s risk and, ultimately, lowering the store owner’s anxiety.
“One thing that I really like about our marketplace is that for us to be successful, all we have to do is make our customers more successful,” said Cortes. “The more we help retailers sell, the more successful they are. And the more they buy from us, the more our brands sell to them, so everybody wins.”
The COVID-19 pandemic has poured rocket fuel into consumer interest in online shopping. It has also fostered a growing preference for independent retail and online platforms in a market dominated by giants such as Amazon and Walmart.
“We started Faire in 2017 with a simple vision: to build a wholesale marketplace that would help small brands and retailers band together to compete on a more level playing field with Walmart and Amazon,” CEO Max Rhodes wrote in a blog post today.
“Over the past year, pandemic lockdowns pushed our community to the brink, but we never lost faith in this vision. In fact, after seeing their adaptation to a digital-first world and a surge of consumer support drive their sales above pre-pandemic peaks, we are more confident than ever in the durability of what they offer the world.”
The Series F financing raise announced today was led by Sequoia Capital, which led Faire’s US$160 million Series E raise in October 2020. The latest round includes existing investors Lightspeed, DST, Founders Fund, Khosla, Forerunner, D1, YC, and Dragoneer in addition to new investors Wellington and Baillie Gifford.
“This latest round is validation that our vision of a more democratized future for retail is resonating with many of the best investors in the world,” Rhodes said. “This new round of funding will also enable us to broaden our vision. We will continue our rapid expansion in categories like food and apparel and in new geographies like Europe, where our sales have topped $50 million annualized mere weeks after our launch there. We will also find new ways to serve our existing communities as they continue to navigate the post-pandemic shift to an omnichannel retail landscape.”