Faire, a wholesale platform founded in Waterloo Region and San Francisco in 2017, has completed a US$170-million Series E investment round that more than doubles its valuation to US$2.5 billion.
It was just 12 months ago that the fast-growing scale-up landed a US$150-million Series D round, which made it Waterloo Region’s newest unicorn – a private company valued at $1 billion or more.
The company plans to use the capital to add new merchandise categories and expand the retail side of the business internationally.
That means staffing up. The company, which currently employs more than 300 people at locations in downtown Kitchener in Waterloo Region, San Francisco and Salt Lake City Utah, says it plans to double that number by the end of 2021.
The Kitchener location, which currently employs about 115 people, will likely grow to over 200 by the end of 2021, said Marcelo Cortes, Chief Technology Officer and co-founder.
“We are growing very fast and we do need to hire people here,” he said.
Faire’s customers are small retail shops – gift stores, speciality stores and the like – and the makers, or brands, that supply them 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.
What it additionally does is give a mom & pop shop staying power – the leverage it needs to face down a Walmart-style big-box competitor, and online retailers such as Amazon.
Cortes said that COVID-19 disrupted the company’s growth plans early on, as the pandemic did with just about every business, but Faire pivoted to focus on making sure its retail customers survived. The company provided its clients with information about the likely impact of the pandemic, urged them to organize their finances to survive the initial shutdowns, and provided a virtual trade show to allow brands to present their wares to retailers.
“When COVID hit, we said OK, we have money, we are very likely to survive, but if our customers don’t survive, we don’t have a business,” Cortes said. “So, we stopped this very hyper growth mode that we’ve always been on… and we went into a mode of trying to help our customers understand the situation…. We moved our sales and customer support teams to really focus on helping our customers basically survive this pandemic.”
That tactic has paid off, he said. The company’s main challenge has always been to persuade retailers to do their sourcing online rather than through more traditional in-person buying.
“The whole COVID situation really accelerated that. More stores realized that for them to be competitive and to survive they need to be more efficient and buying online is a way of doing that, and we are here to help them.”
According to Forbes, the latest round of investment was led by Sequoia Capital. Existing investors including Y Combinator, Lightspeed Venture Partners, Forerunner Ventures, Khosla Ventures and Founders Fund participated in the round and were joined by new investors DST Global, D1 Capital Partners, Norwest Venture Partners and Dragoneer.
Faire has raised a total of US$439 million since it was founded in 2017, Forbes reported.
