Online wholesale marketplace Faire, which was created to make life easier for small retailers, artisans and mom-and-pop manufacturers, now is valued at $7 billion following the latest infusion of funding.
Faire’s valuation tripled as a result of the funding round. It has gone from startup to unicorn-times-seven in just four years.
The $260 million Series F investment round is another sign that tech investors are betting there is money to be made with digital solutions for small businesses.
The success of Shopify, the small-business focused web-hosting platform, which has seen its stock soar from an initial offering at $17 in 2015 to over $1,220 currently, has made investors eager to get in on the next big thing for small business.
Faire’s business model is to give local retailers the same tools enjoyed by big retailers – collective buying power for better prices, access to capital, free returns, and data on how products are selling across the country. Faire also handles payments and makes international transactions easier for mom and pop shops, and earns commissions on sales made through the site.
The funding round, let by Sequoia Capital, includes all existing investors as well as new investors Baillie Gifford and Wellington Management. The investment comes as Faire is expanding into Europe, and tapping into the $1 trillion European market.
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Faire is currently operating in the largest markets in Europe, including the United Kingdom, France, Germany, Spain, the Netherlands, and Italy, and plans to expand across all of continental Europe this year.
According to Faire, the potential for rapid growth is even stronger in Europe than in the United States.
Faire’s volume in Europe is annualizing to roughly $50 million, a scale that took two years to reach in the United States, and during the first 30 days of launching in various European countries Faire’s Europe growth outpaced U.S. growth by 230%, according to the company.
Faire’s founders say their company’s ability to triple their business in the midst of a pandemic, with sales of over 75 million items last year, is more evidence that betting on small business was a smart move.
“Faire’s pace of growth signals that independent retailers across the globe are evolving and changing the face of the retail industry as we have known it,” Faire CEO and co-founder Max Rhodes said in announcing the funding.
Faire currently is used by 200,000 retailers across North America and Europe, as well as 20,000 manufacturing brands in over 80 countries.
“We are in the midst of a multi-decade digital transformation,” Ravi Gupta, partner at Sequoia Capital, saids. Faire, Gupta said. “is leading the way in digitizing the multi trillion-dollar global wholesale market.”
Rhodes and his co-founders – Marcelo Cortes, Jeff Kolovson, and Daniele Perito – got the idea for Faire when they were trying to sell a high-end umbrella. While they spent a lot of energy trying to sell the umbrella in big department store chains, they noticed that the umbrella actually sold better in independent stores and boutiques. But there was no easy way to reach those stores or connect with them digitally. So Faire’s founders built one.
Now, they like to point out that independent retailers in North America and Europe do more than twice the revenue of Walmart WMT and Amazon AMZN combined. And as Shopify showed, if you take a small slice of millions of small business sales, you’ve got yourself a big business.