Near and Clear

EXECUTIVE SUMMARY

• In the digital era, data is the bedrock of decision-making, fuelling business strategies worldwide.
• However, the tightening landscape of privacy regulations presents challenges in capturing and utilizing data, particularly for advertisers and marketing departments across industries.
• In this complex backdrop, Near, a data intelligence startup, asserts its unique proposition of providing actionable, anonymized insights via its cloud-based AI platform.

DETAIL

In the digital era, data is the bedrock of decision-making, fuelling business strategies worldwide. However, the tightening landscape of privacy regulations presents challenges in capturing and utilizing data, particularly for advertisers and marketing departments across industries. In this complex backdrop, Near, a data intelligence startup, asserts its unique proposition of providing actionable, anonymized insights via its cloud-based AI platform. Yet, in a marketplace saturated with competitors, how will Near distinguish itself?

Beyond the Data Frontier

As consumers spend an ever-growing portion of their time immersed in the digital world, data has risen to prominence as the lifeblood of business strategies. The goal to decipher consumer behavior and patterns using this data has become the Holy Grail for the world of advertising and marketing. This goal, however, has become increasingly elusive due to a rising tide of privacy regulations that restrict data collection and use. This regulatory environment, coupled with the inherent challenges of capturing both digital and offline activity, has created a significant problem for businesses—how can businesses gain actionable insights from data while respecting privacy laws and consumer preferences? 

Near, a data intelligence-focused firm is hoping that its products help companies attain this goal. The company has developed Allspark, an AI platform operating across 44 countries that curates anonymized, location-based profiles on a massive scale—1.6 billion profiles monthly. This data encompasses mobile phones, data partners, carriers, and customers and is designed to respect privacy by design. In addition to Allspark, Near also offers Pinnacle, which provides predictive analytics and competitor intelligence, augmenting its data intelligence suite.

Near’s ability to source data from a broad spectrum of providers—including mobile carriers, data providers associated with numerous apps, retailers, and Wi-Fi operators—offers a robust and diversified data ecosystem. This ability, combined with a privacy-centric approach, places Near in a unique position to navigate both the technical and regulatory challenges of the data industry. All in all, Near Anticipates a massive total addressable market of $23 billion, but how can it differentiate itself from the dozens of other smart data-gathering platforms? 

Navigating Near’s Niche 

Near’s unique technology suite is founded on patented machine learning algorithms and advanced inferential AI. The company aggregates various data points and crafts individual profiles without employing any identifiable markers. The analytical significance of this innovation is the provision of rich, yet anonymized data, an asset invaluable in a privacy-conscious world. The cornerstone of Allspark, Near’s flagship platform, is a user-friendly, natural language query system that democratizes data analytics. It enables anyone regardless of their technical expertise, to ask specific questions and get precise, data-driven responses. This system’s outputs offer a wealth of insights that companies can use to understand their customer base better and tailor their marketing strategies accordingly.

Interestingly, the numbers produced through Allspark’s queries are a function of the actual data connected to the Near network. This implies that the platform’s reach, while already extensive, still has room for growth, representing a potentially untapped market segment. Moreover, the platform’s flexibility in compliance with various jurisdictional regulations, such as the selective availability of cookie data usage, reflects Near’s conscientious approach to data privacy. This adaptability is key in a global market landscape where data compliance norms vary significantly. The effectiveness of Near’s solutions is evident in its diverse customer base. The company serves a range of industries including Automotive, Government Services, Media & Technology, Retail, Restaurants, Real Estate, and Tourism, boasting high-profile clients such as Ford, Grosvenor, Wendy’s, and News Corp.

Looking ahead, Near’s plans reveal a multi-pronged growth strategy by enhancing its offerings and expanding its market reach. By providing a wider variety of unique data sets and driving the adoption of operational intelligence, Near aims to broaden its customer appeal. Furthermore, the company’s focus on enhancing privacy-preserving analytics across its offerings indicates a forward-thinking approach that aligns with global trends toward data privacy.

Financials and Valuation 

Near has displayed robust revenue growth over the past few years. The company has rapidly expanded its revenues, from $33 million in 2020 to $59.7 million in 2022. This positive trend can largely be attributed to new customer acquisitions and upselling to existing clients. Looking ahead, Near projects strong growth with anticipated revenues of $81 million and $108 million for 2023 and 2024, respectively. The company’s gross margins for 2022 stood at 68.8%, a slight decrease from 71.5% in 2021. The company forecasts modest growth in its gross profit margins, attributing it to further business optimization and economies of scale. Further, Near expects to benefit from additional operating leverage, inching closer to breaking even by 2024.

Despite the company’s impressive revenue growth, its stock performance since its debut in March has been less than stellar, with a significant 78% loss in value. The stock now trades around $2.2 per share, leading to a market capitalization just north of $100 million. This equates to a valuation of approximately 2x trailing revenues, which, considering Near’s growth rate, might seem reasonable at first glance. However, potential headwinds such as a slowdown in enterprise spending and the company’s projected break-even timeline extending to 2025 warrant a more cautious approach in evaluating Near’s current valuation.

Bottom Line 

Near, with its unique blend of AI-driven technology and commitment to privacy, presents an intriguing proposition in the data intelligence space. The company’s patented solutions, Allspark and Pinnacle, carve out a competitive niche, offering privacy-compliant, actionable insights that are invaluable in today’s market. The company is also accelerating its revenues, expanding its margins, and inching closer to attaining profitability. Near should continue to execute its strategy by landing new customers, introducing new product features, and scaling its existing relationships to stand out from its peers. 

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Originally Posted May 14, 2023 – Near and Clear