SOUTH AFRICA – FARO, an innovative South African startup, has raised US$6 million in funding to combat textile waste and make fashion more affordable across Africa.
The funding round was led by JP Zammitt, President of Bloomberg, with additional backing from venture capital firms such as Presight Capital and Garage Ventures.
Notable individual investors included Mato Perić (MPGI), Leonard Stiegeler (Pulse), Oliver Merkel (Flink), Vikram Chopra (Cars24), Tushar Ahluwalia (Razor Group), and Daniel Funk (Thiel Capital).
With this investment, FARO aims to scale operations and reduce the environmental impact of fashion waste.
The company sources unsold inventory from developed markets and reconditions returned items, positioning itself as a key player in the global resale market while addressing sustainability concerns linked to secondhand clothing imports in emerging markets.
Founded in 2024 after a successful pop-up experiment in 2023, FARO quickly gained traction. Its first pop-up store in South Africa generated US$100,000 in just one month.
The startup exceeded expectations last year, achieving US$2.3 million in revenue with only four stores, highlighting strong market demand for its business model.
Currently operating in urban hubs, mid-market centers, and formal retail spaces, FARO plans to expand to 1,000 locations over the next decade.
Its inventory consists of 40% reconditioned returns and 60% overstock items from leading brands such as ASOS, Boohoo, G-Star, Jack & Jones, and Levi’s.
The startup leverages advanced data analytics and inventory management systems to predict consumer demand, optimize stock levels, and enhance the shopping experience.
This technology-driven approach ensures operational efficiency while keeping prices competitive.
At its core, FARO’s business model aligns with circular economy principles, extending product lifecycles, reducing waste, and promoting sustainability in Africa’s fashion industry.
Growing concerns over South Africa’s textile waste crisis
FARO’s expansion comes at a time when South African municipalities struggle to manage textile waste, with experts raising concerns over the country’s limited recycling infrastructure.
According to Pinpoint Sustainability director Nicola Jenkin, only about 13% of textiles are recycled, while South Africa lacks comprehensive data on textile waste volumes.
A recent report noted that few textile businesses monitor waste tonnages, and even fewer track fiber waste types.
Dr. Noredine Loeid Mahdjoub, a senior research scientist at the University of KwaZulu-Natal, stated that while textile waste is not yet classified as a priority waste, it still ends up in landfills and rivers, exacerbating environmental degradation.
Many landfills are overwhelmed with discarded secondhand clothing that should have been recycled at the source.
With government efforts falling short, private recycling companies have stepped in to fill the gap, diverting large quantities of low-quality clothing illegally dumped into South Africa, primarily from the Global North.
As the country grapples with these challenges, FARO’s sustainable business model offers a viable solution, reducing waste while providing affordable fashion alternatives for consumers.
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