Online retailer Faire Wholesale Inc. raised $ 400 million in its third round of funding over the past 13 months, valuing the startup at $ 12.4 billion, enabling it to expand its workforce and finance function.
San Francisco-based Faire, founded in 2017, provides mom-and-pop stores an Amazon-like marketplace for wholesale items ranging from home decor to clothing.
The capital increase, which closed on Monday, gives Faire funds to accelerate its international expansion and invest in its platform, said CFO Lauren Cook’s Levitan. The company launched its platform in Europe earlier this year and plans to focus on accelerating its growth in the region, said Ms. Cooks Levitan. “This new capital is earmarked to primarily recruit top talent – continue to hire top talent – to grow our teams significantly,” she said.
Retailers using Faires Marketplace have 60 days to pay for their orders. The company says it can afford this because it uses computer science to predict which goods will sell.
Faire employs around 700 people and expects to double its workforce by 2022, focusing on adding employees in Europe. The company expects to end this year with 20 people in its accounting and finance function and plans to hire around another 20 people next year. The additional staff will help build capabilities including tax, payroll, financing and procurement, Ms. said. Cooks Levitan.
Faire generates the majority of its revenue by charging commissions on transactions made on its platform. The company said it typically takes a commission of 25% on orders placed by new customers, 15% on repeat orders and no commission on orders from retailers that wholesalers traded with before using the Faires marketplace.
Over the past year, Faire has sold over 125 million products through its platform. The company declined to provide details on its financial results.
Asked if the company is considering a public listing, Ms. Cook Levitan not in the short term, but possibly later.
“Our focus is solely on giving our customers the opportunity to build successful wholesale and retail businesses,” said Ms. Cooks Levitan. “If the best way for us to continue doing that includes a listing, we would certainly consider it.”
Faires’ latest round of financing included Durable Capital Partners LP, a first-time investor in the company, along with existing investors D1 Capital Partners and Dragoneer Investment Group.
Anouk Dey, a partner at Durable Capital, said she expects Faire to be listed at some point, but in the meantime, the company remains focused on building its business.
Faires’ previous two rounds, in June 2021 and October 2020, included investors such as Sequoia Capital and Lightspeed Venture Partners.
“An IPO is just one step on the journey,” Dey said. She declined to say how much Durable Capital has invested in Faire.
Write to Kristin Broughton at Kristin.Broughton@wsj.com
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