Wholesale marketplace Faire eyes IPO after surviving 'fog of crazy valuations'

The company was valued at $5.2 billion in a tender offer last November, less than half its peak valuation of $12.6 billion in May 2022. Rhodes recalled pressure on Bay Area tech darlings to grow, grow, grow. “It was like the fog of war or the fog of crazy valuations, and the tech industry collectively losing its mind,” he told Fortune. “We got a little addicted to vanity metrics to pump growth.”

Faire, founded in 2017, connects independent retailers with independent brands in categories including decor, food, beauty, jewellery and apparel. Brands pay a commission on sales to retailers, which typically have one or two locations. About 500,000 retailers and 100,000 brands now use the site. The idea came from Rhodes’ own experience as a vendor at a New York trade show, where he paid a $15,000 fee and took only $2,000 in orders.

The pursuit of fast growth was causing questionable decision-making, Rhodes recalled. Early on, Faire lined up brands at breakneck speed, which eventually led to retailer churn and high marketing costs. In 2022, Faire gave many brands the boot, cut jobs and introduced technology aimed at retaining customers long-term. “Reorder rates for the products retailers are buying have gone way up and that’s leading them to come back,” Rhodes said.

In its most recent quarter, Faire generated $750 million in annualised revenue, up 49 per cent from a year earlier, and broke even on an EBITDA basis for the first time. Finance chief Jason Lee said he is readying the company for an IPO without committing to a specific timeline. Rhodes said solving problems for customers is key to durable business success. “Retailers don’t care about how much they’re buying, they care about the quality of what they are buying and whether it actually sells,” he said.