Faire Raises $260M to Connect Brands with Retailers

Faire, an online marketplace for retailers and brands, announced yesterday that it had closed an additional $260 million in funding. The platform, which helps retailers connect with and place wholesale orders from emerging brands, recently expanded to Europe as well.

Led by Sequoia Capital, the round (which also included all existing investors as well as new investors Baillie Gifford and Wellington Management) brings the company’s total fundraising to $698.9 million since its inception in 2017. With this funding, Faire is valued at $7 billion, the company reported, almost triple the $2.5 billion valuation it received just over six months ago.

Founded by former employees of payment processor Square, brands on Faire pay zero commission for orders that come from existing retailers, but they are charged a 25% commission on opening orders and 15% commission on reorders from retailers who find their products via the Faire platform. In addition to helping with discovery, Faire also offers free shipping of orders and handles returns for brands.

Faire works with over 200,000 retailers across North America and Europe and 20,000 brands from over 80 countries, a release noted.

The company plans to use the funding to expand its headcount, which currently stands at roughly 500 employees, continue to improve its technology, and expand into new markets. A release noted the company seeks to “meaningfully compete against retail giants,” offering brands a more direct way to work with retailers without having to employ large sales teams or work with a distributor.

Direct-to-retailer platforms have seen increased interest by brands over the last year, as the Covid-19 pandemic has made sales calls difficult. At the same time, retailers themselves were often open to working with new brands due to existing partners often suffering from supply chain or production issues. Faire also allows retailers to search by brands not listed on Amazon, allowing them to focus on unique products that might drive traffic to their stores.

“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, Max Rhodes said in a release. “Faire will continue to invest in independent brands and retailers at one of the most important times in history, as small businesses reopen around the world. We know that they will rebuild and reimagine the future of retail to better serve their local communities.”

Faire is facing stiff competition from companies Mable and Abound, which both offer similar online platforms. Distributor UNFI also announced its own online marketplace this year. Known as Community Marketplace by UNFI, the website allows retailers like co-ops, independent retailers, or even convenience stores to order from over 20,000 products not available in UNFI distribution centers without minimum order quantities, frequency requirements or membership fees. Then there are other sites, such as RangeMe, that also promise to help brands connect with retailers, although they do not have ordering functionality.

Though brands and retailers seem to be interested in the concept, success isn’t guaranteed. Fellow competitor Hubba abruptly shuttered in February, the cause of the closure still unknown.

With no cost for launching a listing, many brands choose to have a presence on every platform, and then invest more time and effort into whichever leads to more sales. The result is that it’s sometimes hard to see a clear winner among the pack at this time. Still, Faire has proved to offer some unique features that brands appreciate.

“[Faire] was constantly communicating and providing marketing assets to help us market our brand on Faire.” Drink Simple co-founder and CEO Kate Weiler previously told NOSH. “Using online platforms helps us reach consumers that want natural innovative brands, but don’t like using the National distributors either because of their high minimum orders or because they are very difficult to work with if you are a small retailer or food service account.”