Indigo Fair connects local retailers with the perfect merchandise

A new startup called Indigo Fair is looking to change the way local retailers do business — specifically, how they source and manage the inventory they use to stock their shelves. Founded by a team of former Square employees, the company is launching with seed funding from Khosla Ventures, YC and some angels.

Indigo Fair has built a marketplace that simplifies the process local retailers go through to find and order new merchandise. By aggregating merchandise from a number of wholesalers and distributors, the company can offer unique items retailers might not have had access to. They’re also bringing a level or transparency to local retail that hadn’t been available before.

Indigo Fair founders Marcelo Cortes, Daniele Perito and Max Rhodes

The company was founded by a trio of former Square employees: CEO Max Rhodes, who was PM on a variety of strategic initiatives, including Square Capital and Square Cash; CIO Daniele Perito, who led risk and security for Square Cash; and CTO Marcelo Cortes, who was an engineering lead for Square Cash.

Together, they’re looking to reduce the time and money retailers spend finding goods to sell. Today, many find goods by flying around the country and scouring trade shows for unique merchandise from various makers and suppliers. It’s a time-consuming and expensive process that doesn’t guarantee results: Once a product is found, ordered and put in stores, there’s no guarantee it will sell.

On the supply side, Indigo Fair has more than 20,000 products from 5,000 makers from which retailers can choose. Using a bit of artificial intelligence on the backend, Indigo Fair can recommend merchandise that matches a store’s motif. More importantly, it reduces the hassle local store owners and buyers go through when they’re looking to find the goods they use to stock their stores.

Not only does Indigo Fair surface items that retailers might want to showcase in their stores, but it takes a lot of the risk out of testing new products. That’s because it has a no-hassle return policy for merchandise that goes unsold.

Retailers have 90 days from when they receive an item to figure out whether it sells or they’d like to return it. They only need to pay the shipping costs for the order. And because Indigo Fair is working with multiple retailers in local areas, it tries to match unsold merchandise from one retailer with another nearby who might have better luck with a product.

To start, Indigo Fair is targeting the type of retailers you might find if you were wandering around New York’s SoHo neighborhood or walking down Valencia Street in San Francisco’s Mission District: small, independently owned boutiques that specialize in stuff like stationary, jewelry, apparel, gifts and accessories.

Given their experience at Square, the founders have some experience selling into local retail and what it takes to convince SMBs to adopt new ways of doing business. It’s already identified thousands of local merchants and created recommendations for them to seed initial interest in the platform, but, according to Rhodes, the company hopes to make Indigo Fair as self-serve as possible.

The company has raised a small round of funding just to get off the ground — $500,000 from Khosla Ventures, Y Combinator, SV Angel and angels that include Square product engineering lead Gokul Rajaram and DoorDash CEO Tony Xu.