The company is bringing the advertising tool to Canada amid a $5.2 billion stock sale to employees.
fair co-founder and chief architect Marcelo Cortes says his business, a private online wholesale marketplace based in Kitchener-Waterloo and San Francisco, has the metrics of a “very good public company,” but he won't say when it might make the leap.
Cortes said market conditions must be agreed upon before Faire can consider an actual IPO.
“From a performance standpoint, we're in a very good position,” Cortes told BetaKit. However, he stressed that market conditions must be agreed upon for Faire to consider an actual initial public offering (IPO), and for now the IPO market is for new technology issuers stays cool.
Faire, which helps local retailers with physical stores find products from independent brands, has just given Canadian brands access to its first wholesale advertising product, Promoted Listings, one of the company's fastest-growing offerings. Since Faire launched Promoted Listings in the United States just over a year ago, more than 10,000 brands have used the product and its share has grown to five percent of the company's total sales.
Cortez noted that the company is back on solid ground after a six-year rollercoaster period during which the firm was on the safe side. over US$1 billion (CAD$1.4 billion) in funding for a short period of time amid the rapid growth of the pandemic. This was followed by a market decline that included some pain for Faire as the firm restructures, loss of staff and lowered its assessment internally.
Since then, the situation has begun to stabilize, with Cortez stating that Fair is “in a very good and efficient place” although ongoing work in Canada trade war with the USA remains a problem.
Last week, Faire began the process of selling some of its employees shares in the company for cash in a tender offer valued at $5.2 billion, a significant change from $12.4 billion It was once priced in 2021, during the peak of the COVID-19 tech boom.
This secondary deal is led by new US backer WCM Investment Management, with participation from existing UK investor Baillie Gifford and new backer Kitchener-Waterloo. True North Foundation. Bloomberg reported this. The deal is expected to be worth about $100 million, but Cortez said the amount has not yet been determined because it depends on how many companies decide to sell.
Faire is under 'no pressure' to raise capital
Persistently cool IPO market managed global secondary servers to new heights. Many later-stage Canadian tech companies have turned to secondary transactions as a means of providing liquidity to founders, employees and early backers. This also ensures that they have the opportunity to remain confidential longer and continue to achieve greater results. Some examples from 2024 include: 1Password, Clio, Fispan, Jane Software, Secure SoftwareAnd Wealth is simple.
Cortez said Faire's goal in the deal was to give longtime employees the opportunity to gain some liquidity. He said it also helps the company bolster its valuation among outside investors following a write-down of up to $5 billion in 2023 and attracts new backers as the company moves closer to a potential IPO.
Cortez said Faire currently has no pressure to raise any additional capital as the company still has about $500 million left in the bank of the $1.5 billion it has raised to date.
fair disclosed The company reported last week that it has annual revenue of more than $500 million, serves hundreds of thousands of brands and retailers and expects gross merchandise value to reach nearly $3 billion in 2025.
Cortez says Faire has achieved accelerated growth over the last eight quarters, including more than 40 percent year over year in the third quarter, and the company hopes to maintain that growth going forward. He said Faire is also close to profitability as it targets cash flow breakeven in the fourth quarter.
The co-founder pointed to the data to argue that Faire would be an attractive public company, but said Faire was concentrating on its operations in the meantime. “Our goal is to continue to implement…assuming everything is agreed upon, this could happen at some point in the future,” Cortez said.
For his part, Faire CFO Jason Lee told Bloomberg he expects Faire could pursue an IPO in 2026 or 2027, but stressed that the company intends to “take a very measured approach to this.”
The Promoted Listings offer Faire introduced in Canada allows brands using its platform to pay to increase the visibility of their products among retailers on a per-click basis. Through adverts, Fair uses artificial intelligence to match the right brands with the right retailers, with the goal of establishing relationships with “a much larger [return on investment] long-term perspective.”
“We don’t want to just show our products to retailers,” Cortez said. “Our goal in wholesale for a brand is to create a new connection. Retailers are looking for brands that resonate.” [within] in their stores, and once they find these brands, they start with one product, and if that product [sells] well…they keep adding more of the same brand.”
Cortez said promoted ads have already become an important part of how brands can grow on the company's platform.
A Brazilian immigrant who fell in love with Canada, Cortes joined The BetaKit podcast earlier this year chronicled how he tried to bring Silicon Valley DNA to the north, where Faire's engineering team is largely based and more than 300 of its 900 employees work. The company continues to grow in Canada, with more than 20 positions currently open in its Kitchener-Waterloo and Toronto offices.
Image courtesy of Faire.
