Less than two years after launching operations in Waterloo and San Francisco, Faire (formerly Indigo Fair) has raised another US$100 million in response to its explosive growth in the retail-tech market.
The scaling company announced Thursday that it has raised a US$40-million Series B and a US$60-million Series C round, led respectively by Lightspeed Venture Partners and YC Growth. Also participating are new investors DST and Founders Fund, and existing investors Sequoia Capital, Forerunner Ventures and Khosla Ventures. The new funding brings total investment in Faire to US$115.9 million since the company’s spring 2017 debut.
The new investment reflects the hyper growth seen at Faire, whose AI-powered platform helps local retailers find and buy unique inventory items that are most likely to sell. This reduces retailers’ inventory risk and the likelihood of returns. Faire also connects makers of artisanal items with interested local retailers.
The funding will enable Faire to add more engineering and product-related jobs across the company and at its Waterloo Region office in downtown Kitchener, which currently employs 20 people. That’s double the number a year ago, and company co-founder and CTO Marcelo Cortes, who heads the Waterloo Region office, expects the current roster to more than double again in the coming year, to about 50.
Currently housed in offices at 41 King St. W., Faire will soon be moving into a larger new space just down the street. Cortes told Communitech News that the new location is 165 King St. W., the former Budd’s department store that Jay Shah, Director of the University of Waterloo’s Velocity program, now owns and is renovating.
“We’re very excited to continue growing our presence in the region,” Cortes said in an email interview.
The $100 million in new investment is far more than the $20 million Faire set out to raise early in 2018, after it announced a $12-million Series A round in February. But, “frankly, the growth outstripped investors’ expectations, which catalyzed the accelerated interest in investment,” Cortes said.
Faire, he said, is on track to surpass $100 million in sales for 2018, which is 10 times what it projected for 2017. The company has seen its active retailer count soar by 3,140 per cent in 2018, to 15,000 stores across the United States ordering from its platform. That’s more retail locations than Walmart, Sephora and Nordstrom combined.
Faire’s large and growing success in selling to local, bricks-and-mortar retailers runs counter to the narrative that online shopping is killing small retail.
“As far as market opportunity goes, the local retail market is massive, with over one million independent retailers and $800 billion in annual revenue” in the U.S., Cortes said. “As big-box retail stores have shuttered, local retail stores have thrived and survived. There’s a huge opportunity to accelerate the local retail economy, and Faire is uniquely positioned to do that through its platform and data-oriented approach.”
On the maker side, the company grew its community to almost 2,000 makers, a 445 per cent increase over the previous year. Faire retailers have found that inventory items made locally sell 20 per cent better than other goods.
The company, whose overall employee count has grown from eight to 61 in 2018, launched in the spring of 2017 billing itself as the “Amazon for local retail,” with its business headquarters in San Francisco and its engineering operations in Waterloo Region.
Cortes and his two co-founders, Max Rhodes and Daniele Perito, are alumni of Square, the Jack Dorsey-founded mobile-payment company. Rhodes and Perito were based in California while Cortes, formerly of Google’s Waterloo Region office, joined Square before it set up an office here in 2014.
After working together on the popular Square Cash product, the three decided to start what they initially called Indigo Fair and applied, last-minute, to Y Combinator’s Winter 2017 cohort. They were accepted and have since been named one of the prestigious Silicon Valley accelerator’s top companies.
Communitech is a partner of Startup HERE Toronto. This article originally appeared on their site.