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Sunday, May 19, 2024

Near Ascends

Near Intelligence CEO, Anil Mathews, at company HQ in Pasadena, CA.
Anil Mathews, chief executive of Near Intelligence, in his Pasadena headquarters. (Photo by Thomas Wasper)

Pasadena-based consumer data company Near has gone public via a special purpose acquisition company.

It was renamed Near Intelligence Inc. following the business combination with SPAC KludeIn I Acquisition Corp.

Near began trading on the Nasdaq under the symbol “NIR” last month. Prior to the initial public offering, Near closed $100 million in financing from Blue Torch Capital last November. As part of the closing, it also executed an equity line of credit for up to $100 million with financial services firm Cantor Fitzgerald.

“As a public company, there’s more scrutiny on what we say and do, and this scrutiny gives our customers the confidence to work with Near as a long-term partner,” Anil Mathews, Near’s chief executive, said. “In the short amount of time since we’ve been public, we have already seen a positive response from our customers and prospects.”

Starting off

Near, founded by Mathews in 2012, uses consumer data and artificial intelligence to provide partnering businesses with insights into consumer behavior and trends. Its two main products are called Allspark and Pinnacle. Allspark’s data is focused on people and products, while Pinnacle’s data is focused on location. 

About 87% of Near’s income is recurring and comes from licensing these products to customers. The rest of Near’s revenue comes from one-off projects. Its products are offered on a subscription basis, which involves a base platform fee followed by tiers depending on the volume of data being analyzed. Prices typically start at $50,000 a year and can go as high as eight figures.

“What we’re doing is we’re bringing massive amounts of data from different sources and from different signals to understand consumer behavior,” Mathews said. “You could look at this data in two lenses: you could look at it from a lens of people, or a lens of place.”

Allspark provide insights into this data, such as the age group and demographic of customers or how often a given customer visits a particular location. Pinnacle is used by companies across the tourism and retail industries, among others. Clients include the Hawaii Tourism Authority and Wendy’s. Mathews said the tourism authority uses Near’s data to evaluate trends such as where visitors of Hawaii are traveling from, if tourists are traveling between different Hawaiian Islands, and how long they stay. Other clients include Ford Motor Company, Little Caesar’s Enterprises Inc., Orange Bank & Trust Co. and News Corp.

Mathews said having access to data is one thing, but having it be clean and deriving intelligence out of it is another. Data cleaning involves fixing or removing inaccurate, duplicated, improperly formatted or irrelevant information in a dataset. Near’s data comes not only from apps and websites, but also phone service providers and Wi-Fi networks. The data is then cleaned, and the company utilizes AI and machine learning to form insights from it.

“We’re using clean, rich data that is modeled using a lot of patented algorithms to basically give you(accurate insights and cut through all the misinformation,” Mathews said.

Valuing the company

Near and KludeIn originally announced their intent to merge in May of last year. Near issued a statement at the time that it anticipated a post-transaction pro forma market cap of about $1 billion. Mathews said the final deal was based on a pre-money enterprise valuation of $575 million, a reflection, he said, of a change in market conditions since Near decided to go public.

Near markets its database as being built with “privacy by design.” Consumer data vendors such as Near have both a great variety and large volume of customer data at their fingertips. Near said it protects its data by giving each consumer a randomized, anonymized unique ID. No information is individually identifiable, and client companies receive aggregated data only. Near said that it has data on approximately 1.6 billion users and processes more than 5 billion events per day. Near officials declined to disclose the company’s exact number of clients.

Near’s clients are primarily in the retail, real estate, restaurant and tourism industries. Mathews said the data is especially useful for companies in these industries because they need to understand where consumers are spending their time and money. He described a shift in consumer behavior following the pandemic and added that Near saw an influx of business as companies tried to understand how this shift impacted their own customer base. 

This shift, he said, involved customers’ relationship between physical and online consumption. Examples include whether customers want to shop in-store or online, whether they are working in person or remotely, and if they would rather eat out or order in food. 

“Our strength lies in three things,” Mathews said. “One is having access to massive amounts of data which is proprietary to Near. Number two is basically (that we) clean it up and derive intelligence out of it. And number three is … how we productize it and bring it to Allspark and Pinnacle.”

Near reported 32% annual revenue growth and 120% net revenue retention in 2022. Full-year total revenue was $59.7 million, up from $45.3 million the prior year. Mathews said that the company plans to bring in $81 million this year and achieve a 35% growth rate.

“We believe that, in time, being public will provide us with access to capital that we wouldn’t have had as a private company,” he said. “The currency will not only allow us to double down on our growth plans, both organically and inorganically, but also to hire some really smart people out there.”

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Zane Hill Author