FARO, a pioneering South African startup, has successfully raised $6 million in funding to make fashion more affordable while addressing the significant issue of textile waste across Africa. This substantial investment round was spearheaded by JP Zammitt, President of Bloomberg, and saw participation from prominent venture capital firms such as Presight Capital and Garage Ventures. Additionally, the round attracted individual investors including Mato Perić (MPGI), Leonard Stiegeler (Pulse), Oliver Merkel (Flink), Vikram Chopra (Cars24), Tushar Ahluwalia (Razor Group), and Daniel Funk, Managing Director of Thiel Capital.
The newly acquired funds will empower FARO to scale its operations and amplify its impact on one of the fashion industry’s most pressing sustainability challenges—textile waste. FARO leverages the paradox of unsold inventory in developed markets and the environmental damage caused by secondhand clothing imports in emerging markets, positioning itself strategically within the burgeoning global resale market.
FARO officially launched in 2024, but its journey began in 2023 with an experimental pop-up store in South Africa. This initial venture was a resounding success, generating an impressive $100,000 in its first month. Based on traditional retail benchmarks, the company initially estimated that it would require seven stores to achieve $2 million in annual revenue.
Defying expectations, FARO achieved $2.3 million in revenue last year with just four stores, marking an extraordinary 20x growth. The company operates in urban hubs, mid-market centers, and formal retail spaces, consistently outperforming standard retail projections.
Currently, FARO operates four stores and has ambitious plans to expand to 1,000 locations over the next decade. Its inventory strategy includes approximately 40% reconditioned returns and 60% overstock items, sourced through partnerships with major brands such as ASOS, Boohoo, G-Star, Jack & Jones, and Levi’s. These items are sold at discounts of up to 70% off retail prices, making them highly attractive to budget-conscious shoppers.
The recommerce startup’s business model revolves around purchasing unsold inventory from suppliers, giving these products a second life while reducing waste. This approach not only supports sustainability but also ensures essential goods remain accessible to consumers.
Looking ahead, FARO aims to achieve fivefold growth this year, according to CEO David Torr. The company’s ambitious plan to scale to 1,000 stores will rely on building localized pricing profiles tailored to regional demand and the brands available, particularly as it expands into other emerging markets.
FARO’s solution supports a circular economy by extending the lifecycle of products while saving costs for consumers and suppliers. This concept aligns with growing global efforts toward sustainability, especially in the retail sector, where unsold goods often end up in landfills.
A significant element of FARO’s success is its technology-driven approach. The company employs advanced data analytics and inventory management systems to predict consumer demand accurately, optimize stock levels, and create a seamless shopping experience. These tools also enhance efficiency, helping FARO operate at scale while keeping costs low.
Such innovation is not entirely new to African markets, where startups are finding ways to address similar challenges. For instance, Nigeria’s PrognoStore has developed a 3-in-1 point-of-sale system that combines sales, inventory, and analytics for small business owners. By streamlining operations, the software helps shop owners make informed decisions and improve profitability.
Similarly, Côte d’Ivoire’s Waribei is empowering small traders with inventory financing solutions. By providing merchants access to stock on credit, Waribei helps them expand their businesses and increase revenue. These success stories demonstrate how technology can transform inventory management and improve access to goods.
Moreover, FARO’s model exemplifies how combining technology with sustainable practices can drive positive change. Its impact extends beyond profits, influencing how businesses think about waste, resource efficiency, and affordability. With its innovative approach, FARO sets a new benchmark for the retail industry, offering lessons that can inspire similar ventures across Africa and beyond.
