The Wall street sign hangs outside the New York Stock Exchange (NYSE) building on March 11, 2025. REUTERS/Shannon Stapleton
SAN FRANCISCO: Online marketplace Faire has kicked off a process for some employees to sell their shares in the company at a US$5.2bil valuation, in a move that brings it closer to an initial public offering (IPO).
The share sale is being led by WCM Investment Management, a new investor in the company, with participation from existing holder Baillie Gifford & Co and new investor True North Fund, according to a company announcement.
The deal is expected to be for about US$100mil, according to sources.
The so-called tender offer will result in the first public valuation since Faire raised a US$400mil funding round at US$12.4bil in 2021.
Two years later, the company internally revised its valuation down to US$5bil.
That reset was a “reflection for the mark of that time” and is “part of the journey for a company”, according to chief finance officer Jason Lee.
Faire is an eCommerce platform that connects more than 100,000 brands with storefront businesses through its website, working with hundreds of thousands of retailers around the world.
The company is generating revenue at more than US$500mil on an annualised basis and expects to generate nearly US$3bil in gross merchandise value, the announcement showed.
Faire is also nearing positive earnings before things like taxes and depreciation, the company said.
Sales of already-existing shares let employees and other investors in private companies liquidate some holdings before the firm goes public.
With the market for IPOs still touch-and-go, a growing number of startups have leaned on tender offers to allow workers to sell.
“Faire is enabling employees to sell shares in part to set an external valuation and bring on high-quality investors,” said Lee.
The company’s cash position of nearly half a billion dollars positioned the raise to be for secondary shares, with Faire not needing to raise money at this time, he added.
The deal is also a step toward enabling Faire to go public at some point.
“This business has all of the attributes to be a public company and we are actively working on it,” Lee said in an interview.
“My expectation is that we will have that option, whether that’s next year or the following year, but we will be very deliberate about it.”
The company’s 2021 round was led by Durable Capital Partners, D1 Capital Partners and Dragoneer Investment Group, it said in a statement at the time. — Bloomberg
