Faire, which has built a marketplace connecting retailers to indie brands around the world, has raised a $416 million extension for its Series G financingmore than double the size of the round, the company confirmed to MovieUpdates today.
With the additional capital, Faire is now valued at $12.59 billion in arrears, or just under $200 million more than its November valuation, the company said. Sustainable Capital Partners, D1 Capital Partners and Dragoneer Investment Group jointly led the first tranche of the financing.
Faire raised $400 million in a tranche last November that valued the company at $12.4 billion. Since then, it has raised an additional $196 million from Sequoia and Y Combinator, as well as another $220 million from other existing investors, bringing the total raised in Series G funding to $816 million.
Usually extensions are flat rounds, so this is not uncommon. But what we may be seeing more of in an increasingly challenging fundraising environment is companies choosing to go the renewal route rather than raising fresh capital as a new round of funding.
“We are not surprised that expansions are taking place. Extensions are easier from a paperwork perspective,noted Phil Haslett, founder and chief strategy officer of EquityZen, an online marketplace for trading pre-IPO employee stocks of privately held companies. “It feels like flat is the new.”
For example, if we were still in 2021, the additional capital raised months after the close of financing might have required a whole new round of financing. But in today’s environment — where many LPs and VCs are pulling back investments — some companies that have raised in the past 18 months or so will find that it makes more sense, both from a financial and administrative standpoint, to do follow-up financing instead.
“With extensions, you can go to existing investors and get their sign that you’re going to make the rounds a little bit bigger,” Haslett said. “In general, the conversation could be something along the lines of ‘Hey, in this market we thought it made sense to get some extra cash and it’s for the same price you paid six months ago.’ And the company is able to strengthen its balance sheet.”
With the latest funding round, Faire has raised more than $1.4 billion since its inception in 2017.
Faire’s model is interesting because it wants to be an indie Amazon, if you will. It connects emerging independent companies around the world with local retailers so that their goods can be sold to more people.
In mid-November, when it announced its latest raise, Faire said it saw “more than 3x year-over-year growth” and had reached more than $1 billion in annual volume in less than five years. That same month, Faire noted that six months after expanding to 15 markets in Europe and the United Kingdom, annual sales volume in the region was over $150 million — “a scale that took nearly three years in North America.” it said.
According to his website, his marketplace connects more than 450,000 retailers worldwide with more than 70,000 brands from more than 100 countries.
The company continues to grow in Europe and was recently launched in Australia. The new capital will go toward that global expansion, continued hiring and product development — including working on a product to be a “wholesale operating system (OS),” the company said.
Now more than ever, it makes sense that retailers offering more unique products could see competitive advantages, which companies like Faire only want to increase.