Faire

Sometime in 2021, Max Rhodes caught himself thinking something dangerous: It's weird that there aren't more hundred-billion-dollar companies, because it doesn't seem that hard to do. His company, Faire — an online wholesale marketplace connecting independent brands with local retailers — had just closed a $260 million Series F at a $7 billion valuation, tripling its worth in under a year. The numbers kept arriving like champagne toasts: $1 billion in annual transaction volume, 100,000 retailers on the platform, expansion into 15 European markets in a single push. Faire was burning $30 million a month and nobody blinked. The team doubled. Then doubled again. They would be the next Airbnb, the next DoorDash, the next platform company to bend an industry into a new shape around itself. And then the thing that always happens, happened.

By mid-2022, the gallop had decelerated into something closer to a stumble. Decisions that once took hours now took weeks. Customer service — the lifeblood of a marketplace serving hundreds of thousands of small business owners who depended on personal relationships — degraded visibly. Makers complained on YouTube that support tickets went unanswered for days. Retailers who had once evangelized the platform began to grumble. Inside the company, Rhodes and his co-founders confronted a sensation he would later describe with disarming bluntness: an icky feeling. "The lesson for me here," Rhodes said, "was that if it feels easy, it probably means you're doing it wrong."

What followed was a contraction as deliberate as the expansion had been reckless — layoffs of 7% in October 2022, then another 20% in November 2023, roughly 250 people. A valuation that had peaked at $12.59 billion compressed to $5.2 billion in a late-2024 employee share sale. The unofficial motto of Silicon Valley — growth, growth, growth at all costs — had been tried, tested, and found nearly fatal. Faire survived. The question is whether the thing it became on the other side of that near-death experience is stronger than the thing it was before. The answer turns on a deeper question about what marketplaces actually are, how they create value, and what happens when the real competitive advantage isn't the network but the data flowing through it.

The founding mythology of Faire is unusually specific — not a eureka moment but a series of paper cuts that accumulated into a thesis. Max Rhodes, a history major from Yale who claims soccer helped him land every job he ever held, was a product manager at Square in San Francisco. He'd joined the company early enough to be the founding PM for Square Capital and the first product manager on Square Cash (later Cash App). At Square, he learned the power of technology to reshape the daily operations of small businesses — but only on the sell side. The buy side, the sourcing of inventory, remained medieval.

Rhodes discovered this personally. On the side, he and a couple of friends had been distributing high-end umbrellas from a New Zealand brand called Blunt to retailers and consumers in the United States. Department stores were easy to reach. Smaller independent shops — the gift stores, the boutiques, the one-location curiosity shops where the product actually sold best — were unreachable at scale. There was no online channel. The options were trade shows (expensive, infrequent, geographically constrained) or cold emails (time-consuming, low-conversion). The wholesale industry, a market valued at more than $11 trillion in the US alone, operated on faxes, phone calls, and handshakes.

By 2016, Rhodes had resolved to leave Square and start something. Nearly everyone told him not to — or at least not without a burning idea. He plowed ahead anyway, recruiting three colleagues from Square: Marcelo Cortes, a Brazilian-Canadian engineer who'd been a senior software engineer at Google before Square and who would head the Kitchener, Ontario engineering office; Daniele Perito, an Italian from Cassino, in the province of Frosinone, who'd directed security and risk engineering at Square and brought a machine-learning sensibility to fraud detection and underwriting; and Jeffrey Kolovson, who'd led the retail team at Square and run operations for Caviar, Square's food delivery business. They explored several ideas before wholesale — a car insurance company for low-income migrants, a dental drill, the umbrella distribution business itself. None stuck. The marketplace concept, when they finally articulated it, felt different.

"It felt right instantly," Rhodes said. "We were solving a problem we understood really deeply."

They launched as Indigo Fair in January 2017, entered Y Combinator's Winter 2017 batch, and raised a $3.4 million seed round in November of that year. The name simplified to Faire soon after. The tagline — "The future is local" — was aspirational, but the operating insight was ruthlessly pragmatic: the wholesale market was so fragmented on both sides — millions of brands trying to reach millions of retailers — that the matching problem alone justified a marketplace. And unlike consumer marketplaces with small order values, these were serious transactions. Hundreds or thousands of dollars per order. Intrinsically recurring. The economics, if they could get the flywheel spinning, would be extraordinary.

Every marketplace founder confronts the same existential riddle: you need supply to attract demand, but without demand, you can't attract supply. Faire's solution was as elegant as it was financially perilous. They offered retailers two things no wholesale supplier could match: net-60 payment terms — buy now, pay two months later — and free returns on opening orders within 60 days. This meant a gift shop owner in Portland could order $2,000 of candles from a maker in Ohio, try them on her shelves for two months, return whatever didn't sell, and never pay a cent for the unsold inventory. The risk shifted entirely to Faire.

It worked — spectacularly and then catastrophically. Within three months of implementing net-60 terms, Faire's monthly gross merchandise volume jumped from $100,000 to $1 million. The growth curve was vertical. But so were the losses. In January 2018, a shocking percentage of products sold got returned, and an even more shocking number of retailers never paid. Faire was hemorrhaging money on every order, and the orders kept coming faster. Growth, in this model, was a weapon pointed at both the target and the shooter.

The founders' Square DNA — particularly Perito's background in risk engineering and Cortes's data-first instincts — saved them. They pivoted the internal machinery without dismantling the customer-facing proposition. They imposed credit limits on retailers, re-ranked makers and products based on sell-through data, and rebuilt the invoicing experience to reduce friction in payments. They built a prediction algorithm — crude at first, then increasingly sophisticated — that ingested every transaction to model which products would sell in which types of stores and which retailers were creditworthy. Within six months, return rates dropped 75%. Defaults fell nearly 90%.

This sequence — offer a radical subsidy to ignite the marketplace, nearly die from the subsidy's consequences, then use data to make the subsidy sustainable — became Faire's foundational pattern. Every major strategic move that followed was a variation on this theme.

To understand Faire's strategic position, you need to see the stack. One early angel investor, Pete Kazanjy, framed it with unusual clarity: if Amazon and Walmart represent a "full stack" of merchandise sourcing, logistics, and ecommerce, then Square and Shopify represent the ecommerce layer of a "rebel commerce stack" — the technology that lets independent businesses sell. The retailer's physical real estate is the logistics layer. Faire was positioned to be the sourcing layer — the mechanism by which independent retailers discover, evaluate, and purchase the inventory that fills their shelves.

This framing matters because it identifies Faire not as a niche marketplace for artisan candle makers (though it started there) but as a potentially foundational piece of infrastructure for a $3.5 trillion independent retail economy. As of November 2023, there were 2.7 million independent retailers in the United States generating an estimated $3.5 trillion in annual revenue — roughly three times the combined revenue of Amazon and Walmart. The wholesale market underpinning this retail economy exceeded $11 trillion. Faire's billion-dollar transaction volume, impressive as it sounded, represented a rounding error of the addressable market.

The competitive dynamics reinforced the position. Etsy had tried B2B wholesale and shut it down, discovering that its consumer-scale makers couldn't support wholesale economics. JOOR served the fashion vertical. NuORDER (acquired by Lightspeed POS in 2021) focused on specific brand-retailer workflows. Juniper, backed by International Market Centers with over $100 million in investment, launched before the pandemic, delayed repeatedly, never gained traction, and was shuttered in late 2022. Ankorstore, a French competitor, raised significant capital but operated primarily in Europe without matching Faire's data infrastructure or terms. Tundra, Faire's most direct US competitor, offered zero-commission transactions — and Faire and Tundra ended up in federal court over allegations of unfair competitive practices.

None of these competitors replicated Faire's core trick: combining the marketplace with embedded financial services and a recommendation engine that improved with every transaction. The free returns and net-60 terms weren't just customer acquisition tactics; they were data-generation mechanisms. Every return taught the algorithm which products didn't work in which contexts. Every default refined the credit model. The subsidy funded the flywheel.

Marcelo Cortes, the CTO, described Faire's essential insight in language that revealed the company's true nature: "If you think of a small store, a brick and mortar store that might have one to five locations, they're trying to compete with much larger brick and mortar stores, big box stores, or with eCommerce. They have no data. If you think of Walmart, they have data on all their products. They know what sells well where, and what time of the year. The little store, they're buying products basically all by intuition."

Faire's founding bet was that it could give the corner gift shop the same purchasing intelligence that Walmart's merchandising team wielded. Not by building a Walmart-scale analytics department for each shop, but by pooling transaction data across the entire marketplace — hundreds of thousands of retailers, millions of products — and using machine learning to predict what would sell where. The recommendations varied by retailer type, purchase history, geographic location, and conversion patterns. A pet store in Austin saw different products than a kitchen boutique in Brooklyn. The more retailers bought (and returned, and reordered), the more accurate the predictions became.

This data flywheel was Faire's deepest moat — deeper than the network effects, deeper than the brand catalog, deeper than the financial terms. A competitor could match the net-60 terms (Tundra offered zero commission). A competitor could recruit brands. But no competitor could replicate the accumulated behavioral data from years of transactions across half a million retailers without building the marketplace first. And building the marketplace required solving the chicken-and-egg problem, which required the financial subsidy, which required the data to make it sustainable. The circularity was the defense.

The data science team — led initially by Perito, whose background in security and risk engineering at Square gave him a native fluency in probabilistic modeling — built systems that extended well beyond product recommendations. They modeled retailer creditworthiness to underwrite the net-60 terms, enabling Faire to extend credit to small businesses that banks wouldn't touch. They built outlier detection systems to prevent single anomalous orders from distorting A/B tests. They developed CUPED (Controlled-experiment Using Pre-Experiment Data) implementations to accelerate experiment velocity, enabling rapid iteration despite sample sizes in the tens of thousands rather than millions.

The experimentation culture became a defining feature. As one data team blog post noted, Faire tested "everything, from underwriting models that allow retailers to pay on different terms, to the design of our checkout pages and marketing emails." The CEO himself personally conducted user research rounds. This wasn't performative — it was structural. In a marketplace where the core value proposition was matching the right product to the right store, every percentage-point improvement in recommendation quality translated directly to higher GMV, lower returns, and better unit economics.

Faire's fundraising trajectory reads like a compressed history of the 2017–2022 venture capital supercycle.

The peak-to-trough compression — from $12.59 billion to $5.2 billion — was brutal but not unusual for the vintage. What distinguished Faire's correction from those of peers that simply faded was the specificity of the diagnosis. Rhodes didn't blame macro conditions. He blamed himself and his team for losing discipline. The organizational structure they'd built — multiple layers of management designed to support a pace of hiring that had since slowed — was architecturally mismatched to the company they actually were. They'd hired for the company they imagined becoming rather than the company they needed to be.

The restructuring wasn't merely a headcount reduction. It was a return to first principles: the company reorganized around self-sufficient teams, each responsible for a specific metric that tied directly to a top-level company goal. Decision-making, which had centralized as the company grew and then ossified as layers accumulated, was pushed back to the edges. The six-week product cycle of the earliest days was gone — you can't run thousand-person companies that way — but the discipline of short feedback loops, rigorous experimentation, and relentless customer focus was reinstated.

Keith Rabois, General Partner at Founders Fund and an early backer, offered the bull case with characteristic directness: "Literally, at YC Demo Day, when they presented, as they finished the presentation, I said, 'That's a $100 billion company right there.' The founders are fantastic, the metrics are great, the market opportunities wonderful, even though most people missed it."

A $100 billion company. From a current valuation of $5.2 billion. That gap — between what Faire is and what its most ardent believers think it could become — is the central tension of the business today.

In September 2023, Faire and Shopify announced a partnership that looked, on its surface, like a standard integration deal: Faire would become the "recommended wholesale marketplace for Shopify," which powered millions of merchants worldwide. Shopify became a shareholder in Faire. The details were telling. Shopify had previously operated its own wholesale channel, Handshake, which it had acquired in 2019. The partnership with Faire effectively acknowledged that Handshake had failed to achieve marketplace-scale liquidity and that Faire had won the category.

For Faire, the Shopify relationship was transformational on the demand side. Millions of Shopify merchants — many of whom were brands looking to expand into wholesale for the first time — gained a direct on-ramp to Faire's marketplace. The integration meant that a DTC brand running a Shopify store could list its products on Faire with minimal friction, instantly accessing Faire's network of 700,000 retailers. For Shopify, the deal solved a strategic gap without requiring the investment of building a wholesale marketplace from scratch — a task that, as Juniper's $100 million failure demonstrated, was considerably harder than it appeared.

The partnership also reinforced Faire's positioning as the sourcing layer of the rebel commerce stack. If Shopify was the ecommerce operating system for independent merchants, and if physical storefronts provided the logistics and customer experience layer, then Faire was the tissue connecting supply to demand — the wholesale infrastructure that enabled the entire ecosystem to function.

Faire's evolution from a marketplace for handmade artisan goods to a comprehensive wholesale platform is visible in its category expansion. The platform launched with crafts and handmade items — shibori scarves, beaded jewelry, tasseled straw bags. The early brand base skewed toward makers: small, often one-person operations producing goods in limited quantities. The romance of the "shop local" movement was genuine and useful for marketing, but the economics of small-batch artisan goods were inherently limited.

The pandemic accelerated a category expansion that had been underway since 2019. When trade shows shuttered and retailers needed an alternative, Faire became the default. Larger brands — food and beverage companies, established home goods manufacturers, book publishers — began joining the platform. The categories multiplied: pet supplies, gourmet food, fashion accessories, stationery, wellness products.

The book category illustrates the trajectory. By early 2025, Faire reported a 75% year-over-year increase in book sales, with publishers and booksellers generating over $100 million in volume on the platform. Simon & Schuster, one of the Big Five publishers, joined Faire in late 2023 and reached more than 5,000 retail storefronts through the platform. Nearly 50,000 retailers purchased books through Faire in the preceding year — including non-traditional storefronts like reiki centers, plant nurseries, and coffee shops. Lauren Cooks Levitan, Faire's president, framed it as proof that "brands that diversify their channels can benefit greatly from growth in new categories of buyers."

The expansion from artisan candles to Simon & Schuster books represents more than category diversification. It represents a fundamental shift in what Faire is. A platform that began by connecting small makers with small retailers now serves as a general-purpose wholesale distribution channel — one where a major publisher and a one-person ceramics studio compete for the same shelf space in the same gift shop. The implications for take rate, for brand power dynamics, and for the platform's identity are still unfolding.

In September 2024, Faire launched Promoted Listings — its first advertising product — and within months it had become what Rhodes called "the fastest growing business we've ever launched," accounting for nearly 5% of Faire's revenue. More than 7,000 brands were advertising on the platform. Brands that advertised saw an 80% increase in product views in search results and category pages. The model was cost-per-click: brands paid only when a retailer clicked on their promoted listing.

The logic was sound. Faire's marketplace is, fundamentally, a search and discovery engine for wholesale products. Brands compete for retailer attention in the same way that consumer brands compete for shopper attention on Amazon. An advertising layer monetizes that attention without degrading the buyer experience — if the targeting is good. And Faire's targeting, built on years of transaction data, was specifically good. Ad slots were allocated based on product relevance to each retailer and likelihood to convert. The best-performing ads were, by construction, the most relevant products.

By early 2025, Faire was rolling out retargeting capabilities, allowing brands to promote products to returning retailer customers to drive reorders — a feature that 80% of surveyed brands had requested. The ad business had the characteristics of a structural revenue stream: high margin, scalable, and reinforcing to the core marketplace (brands that advertised grew faster, which meant more products for retailers, which meant more retailer engagement, which made the ads more effective).

The retail media playbook was well-established by 2024 — Amazon's ad business generated $12.8 billion in a single quarter — but Faire's implementation was distinctive. As analyst Andrew Lipsman noted, as a wholesale site for local retailers, "the retail media network dynamics for Faire will be somewhat different, since it will generate less traffic than a B2C marketplace, but each converted sale is much more valuable." A single wholesale order could represent thousands of dollars in recurring revenue for a brand. The economics of acquiring that customer through a $2 click were transformative for small CPG companies that couldn't afford trade show booths.

Faire's international expansion was a masterclass in controlled aggression. The company launched in the UK and Netherlands in March 2021, then rapidly expanded into France, Germany, Italy, the Nordic countries, and eventually 15 markets across Europe and Australia. Within six months of entering Europe, its annualized sales volume in the region already constituted a meaningful portion of total business.

Rhodes studied other companies' playbooks carefully. From DoorDash, he took the lesson that local execution matters more than brand awareness. From Airbnb, the insight that supply-side quality determines marketplace velocity. He developed an analogy he used internally: international expansion is like planting trees. You want to plant early enough that they're mature when you need them, but not so early that you waste resources watering saplings in soil that isn't ready.

The operational model was pragmatic. Faire staffed local teams in each market but kept core technology and data infrastructure centralized. The recommendation engine, trained on North American transaction data, was adapted rather than rebuilt for European markets. The commission structure was adjusted — lower rates in Europe to drive adoption against established offline wholesale relationships that were more deeply entrenched than in North America. The cultural challenge was real: European retailers had longer-standing relationships with sales representatives and a stronger tradition of in-person trade shows than their American counterparts. Faire's proposition — try before you buy, discover new brands algorithmically, manage everything through a single platform — had to overcome not just inertia but genuine attachment to personal relationships.

By 2025, Europe accounted for an estimated 22% of Faire's revenue, with the rest of the world contributing approximately 10%. North America remained dominant at roughly 68%. The international business was growing faster than the domestic business, suggesting the trees were maturing.

Rhodes articulated Faire's cultural values with unusual specificity. "We put a high value on intellectual honesty and rigor, so if you're not a curious person who loves digging into things, you might not be a good fit," he said. "You also need to be kind, which is just a nicer way of saying 'no assholes.' And the most important thing for us is the mission. There's almost a one-to-one correlation between how excited someone is about what Faire is trying to do and how successful they are in the company."

The hiring process reflected these values. Rhodes developed a structured approach he described as "deep behavioral interviews" — not hypothetical case studies but excavations of actual past behavior. He used a reference-checking system that bordered on forensic: making referees comfortable enough to share genuine assessments, deploying a 1-to-10 rating scale, probing specifically for patterns rather than anecdotes. The goal wasn't to find brilliant individuals but to find brilliant individuals who would thrive in Faire's specific operating environment — one that demanded comfort with ambiguity, data-driven argumentation, and genuine care about small businesses.

The strategy documentation process was similarly deliberate. Rhodes co-authored a master strategy document with the leadership team, updated at six-month intervals, shared company-wide. The company tracked its "5Ss" — the five most important strategic initiatives — and used OKRs not as rigid measuring sticks but as guideposts for alignment. Biweekly business review meetings were open to anyone in the company, with notes made broadly accessible. The system was designed for what Rhodes called "decentralized decision-making with centralized information" — pushing authority to the edges while ensuring everyone operated from the same strategic map.

The 2023 restructuring tested these values. Laying off 20% of a company that prided itself on kindness and intellectual honesty required Rhodes and his co-founders to practice what they'd preached — to confront uncomfortable truths about organizational bloat, to make decisions that hurt people they cared about, and to communicate those decisions with the rigor and transparency they demanded in product decisions. Whether they succeeded is debatable. What's clear is that the company that emerged from the restructuring was leaner, more focused, and — by most available evidence — growing again.

In June 2025, Lauren Cooks Levitan — who had joined Faire as its inaugural CFO in 2019, risen to president in 2024, and played a pivotal role in raising more than $1 billion from top investors — announced she would step down from her executive role to join Faire's board, effective July 1. She was leaving to co-found a startup called Root, where she would serve as CEO.

Levitan's departure was both a loss and a signal. A former Goldman Sachs equity capital markets analyst with more than 30 years of experience in retail, she had been the financial architect of Faire's growth — and, critically, of its discipline. Her background at Fanatics (as CFO), her co-founding of Moxie Capital (a private equity firm), and her board seat at e.l.f. Beauty gave her a rare combination of operational rigor and strategic ambition. She described the skill she would carry into her new venture as "ruthless prioritization" — the CFO's gift of knowing not just what to fund but what to kill.

Rather than naming a new president, Faire distributed Levitan's former responsibilities among other leaders — a structural choice that said something about where the company was. Jennifer Burke, who had joined in 2019 and scaled the revenue teams to more than 15 times their initial size, was promoted to chief revenue officer. Ami Vora, formerly Head of Product and Design at WhatsApp (with its 2 billion users) and Head of Product for Facebook Ads, served as CPO, bringing a consumer-product sensibility to a B2B marketplace. The leadership team had, as Levitan put it, "matured along with the rapid growth of the business."

Faire's tagline — "The future is local" — carries more weight than most corporate slogans. It encodes a bet about the structure of consumer preferences, the resilience of physical retail, and the economic viability of independent business. It is also, frankly, a bet against the most powerful trend in modern commerce: the relentless consolidation of retail around Amazon and a handful of other scaled platforms.

The bet has evidence behind it. The 2.7 million independent retailers in the United States generate roughly $3.5 trillion in annual revenue. Physical stores aren't disappearing — they're evolving. The pandemic, which was supposed to be the death knell for brick-and-mortar, instead catalyzed a renaissance of local retail: consumers who'd spent months isolated in their homes craved the tactile, social experience of shopping in person. The "shop local" movement, once a feel-good bumper sticker, became a genuine economic force. And the retailers driving this revival needed supply chain infrastructure that matched their scale — not Walmart's logistics empire, not Amazon's algorithmic efficiency, but something designed for the specific constraints and opportunities of a one-to-five-location independent store.

Faire built that infrastructure. The net-60 terms gave small retailers the cash flow flexibility that large retailers took for granted. The free returns on opening orders eliminated the inventory risk that had historically prevented experimentation. The recommendation engine provided the merchandising intelligence that Walmart's data teams produced internally. The centralized platform replaced the chaos of managing dozens of individual supplier relationships — each with its own terms, invoicing, and communication channels — with a single dashboard.

The company's network of retail partners, Faire boasted, had more store locations in North America than Starbucks, Walgreens, Walmart, Sephora, Target, and Nordstrom combined. The claim was almost certainly true, given the sheer number of independent retailers on the platform, and it pointed to something remarkable: Faire had quietly assembled the largest distribution network in American retail without owning a single warehouse, truck, or storefront.

On the shelves of a hospital gift shop somewhere in America, a nurse manager who'd never run a retail operation was stocking products she'd discovered through Faire's algorithm — curated, vetted, delivered on terms she could afford, backed by data that predicted what her visitors would buy. Ami Vora, Faire's CPO, told the story with visible emotion. It was, in miniature, the entire thesis: technology in service of small businesses, data as the great equalizer, the local store as the last mile of a supply chain that began with a maker in Ohio and flowed through servers in San Francisco. The future is local. Faire's bet is that the infrastructure behind it doesn't have to be.