joining us now is ceo of next door sarah frier
and sarah thanks so much for coming on. So
why was now the right time to take next door
public? Yeah thank you for having me. It's
a great day for the neighborhood now is a great
time because as we looked out even over 2021 planning
we saw a lot of things we wanted to invest
in but we needed to go put some of that
big boost onto the balance sheet. So in finalizing
our SPAC we know that we'll put about 674 million
of gross proceeds. This allows us to not go
back after investing in growing the neighborhood, more neighbors
, more engagement building on our platform for businesses,
advertisers through the small businesses. And then of course
going global because we know that everyone is a neighbor
and we know that what we do should be a
global phenomenon. So some of next door's growth was
spurred by the need to connect with neighbors during the
uncertainty of the pandemic. So have users remained on
the app even as the U. S. Has
reopened or what kind of changes have you seen at
the beginning of the pandemic? And now as the
pandemic wings? Yeah the Great News is people have
come and they have stuck around and we've always known
this about next door that we're a very high intent
platform if we get you to come through that front
door. The likelihood that you are still there even
two years later, almost 60% of users are still
there two years later engaging. That is a great
sign for us. So post pandemic, we've actually
seen the people who have come be more engaged.
Not clearly we've made our product better. We've launched
things like groups, for example, which we know
were a great way to help people connect during the
pandemic. Help groups were very big on the platform
, but now we see groups broadly speaking, go
to dad's groups, mom's groups, book clubs,
hiking groups, all the things that you can do
in real life. Um, and this gives us
a lot of incentive to keep adding more to the
platform so that every time a neighbor wants to come
and help make their neighborhood stronger, they know they
can get that done on next door. So how
does this SPAC deal allow you to grow your business
? So it's about really raising money. Um,
and if you go back to what we want to
do. So number one is because we want to
bring more neighbors to the platform and help them engage
. A lot of that is about rounding out hiring
today. We're about a 600 person company. We
have a big bold ambitions. So we know we
need to be bigger and hire the best engineers,
the best data scientists, the best designers and product
people. So that will be one big place for
investment across the board. Second were a really big
data platform. So what we have is this power
of place when you join next door, you're a
real neighbor. But in a real neighborhood. And
for advertisers that's really helpful when it comes to targeting
their message on next door and add actually can become
really good content right? If I need a plumber
and I see an ad for a plumber that's actually
solving my need in the moment. So we want
to invest in more machine learning, more data science
in our ad platform and beyond. And then finally
with marketing spend, that's one way we bring new
neighbors to the platform. So as we go global
having a balance sheet where we can go invest to
bring new people to the platform that starts the flywheel
of growth for us in newer countries and newer neighborhoods
, how important is the global growth for your company
? It's incredibly important. Number one, it's our
purpose, right? We want to cultivate a kinder
world, so not just country but world where everyone
has a neighborhood they can rely on. So from
a purpose standpoint we know everyone's a neighbor and we
want to make sure we're there from them. But
also from a business model perspective if we look at
a country like the UK that's probably our second largest
country today in the U. S. From one
in three neighborhoods or 31 in three households in the
UK, we're now in one in five households.
We know that when we start to grow in a
country like that, it also brings monetization. So
our revenue growth in the U. K. Actually
outpaced our growth and neighbors. That's a really good
sign that as we go to new countries, it
also builds our revenue. Our revenue builds our cash
flow cash flow allows us to keep investing for growth
. So how do you expect to become profitable in
the coming years? Yeah. So the great news
is first of all, we have a phenomenal business
model. So today next door is mostly an ad
driven model. Really high gross margins. So gross
margins that are in the high 80% range, that's
always a good start to getting to ebitda profitability.
And then from here it's a balance for us.
We saw Almost a 24 point improvement in margins year
over year. So we know that as we scale
and as we create more and more revenue and hence
the Buddha, but that's driving us towards a profitable
point. But we wanted to be a balance because
we know that investors really care about growth and while
we have opportunity to grow fast, we're going to
keep investing there. What are some features that users
can be excited about that are coming in the near
future? Yes. So one of the biggest things
is connections. So we've always known that often people
don't know their neighbors, but as we've gotten bigger
, the likelihood that you do know that people around
you gets higher and higher. And so we're launching
connections over the next couple of quarters and that will
allow people to give a really strong signal of who
they know or who they want to connect with.
It might also be a local business, it might
be a public agency, but that allows us to
better curate the content that you're getting. And when
you get better curated content, your likelihood of engagement
goes up. More engagement tends to then drive more
growth because more people invite others to the platform.
And so that's a big part of our flywheel for
building a strong business model. All right, big
day for next door that's next to our ceo sarah
fire. Thank you so much for being on the
show and.