Shopify invests in wholesale platform Faire, valuing the e-commerce startup at $12.59 billion
Shopify announced today that it’s making a strategic investment in wholesale platform Faire. The move comes as the e-commerce giant seeks to offer more Business-to-Business (B2B) tools to its merchants. The financial details of the transaction, including the investment amount and Shopify’s ownership stake in Faire, were not disclosed. The latest investment puts the company’s valuation at $12.59 billion.
As part of the deal, the six-year-old Faire, which focuses on independent businesses, would become the recommended wholesale marketplace for Shopify merchants. Aneeqa Khan, Shopify’s Director of Products, said that the deal would streamline the process for Shopify’s merchants to identify wholesale buyers, Reuters reported. Additionally, it will facilitate retailers in sourcing products from Faire’s expansive network of brands.
Under the terms of this arrangement, Faire will assume the role of the recommended wholesale marketplace for Shopify merchants. Aneeqa Khan, Shopify’s Director of Products, affirmed in a statement that this collaboration would streamline the process for Shopify’s merchants to identify wholesale buyers. Additionally, it will facilitate retailers in sourcing products from Faire’s expansive network of brands.
The deal is the latest in a series of investments Shopify has made in recent years to bolster its e-commerce shopping platform. A little over a year ago, we covered Shopify after the Canadian multinational e-commerce company acquired logistics tech startup Deliverr for $2.1 billion in cash and stock to expand fast and easy fulfillment for independent brands across channels.
Founded in 2017 by CEO Max Rhodes, Daniele Perito, Jeffrey Kolovson, and Marcelo Cortes, Faire serves as both a marketplace and wholesale platform, assisting retailers in locating and procuring wholesale merchandise for their establishments. In response to this development, Faire’s CEO Max Rhodes remarked, “This is an endorsement from one of the leaders in the industry.”
Over the years, Faire has seen a significant trend where brands, previously focused on direct-to-consumer sales, are transitioning to a wholesale model in an effort to manage operational costs more effectively. Additionally, smaller retailers are striving to distinguish themselves amid the intensifying competition in both physical and online retail spaces. Faire reported that the most commonly employed search filter on its platform is “Not on Amazon,” highlighting retailers’ desire to source unique and less widely available products.
While the United States remains Faire’s largest market, the company has experienced rapid growth in Europe since its expansion into 15 European countries in 2021, making it the company’s fastest-growing market segment.
Faire also reported collaboration that it currently works with over 100,000 brands, that collectively offer nearly 10 million products. Faire generates its revenue through commission fees on transactions conducted through its platform.
For Shopify, renowned for its provision of tools to create and manage online storefronts, this investment represents the latest in a series of strategic initiatives. Notably, the company had previously invested in the U.S. marketing automation firm Klaviyo, which recently made its debut on the New York Stock Exchange. Shopify also maintains a partnership with Dutch payments firm Adyen, further enhancing its portfolio of services and partnerships.