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Last March, when the real world went online, April Underwood watched as the shops in her neighborhood struggled to stay open because people stopped going there and started ordering everything from Amazon or Walmart. Mom-and-Pop shops took orders over the phone or tried to go online while Twitter activists helped Main Street by putting together Google spreadsheets of independent shops and restaurants that were open for business. Because he was in charge of product development at Slack and Twitter, Underwood knew there was a better way.
Underwood, who calls himself a “software person,” saw the first online attempts to answer the question “What’s open in my town?” as a big flashing light. Underwood tells Forbes that you can’t just use Google Maps or Yelp to find small businesses. Also, the tools that could have helped stand-alone businesses switch to selling online were either not available or too expensive.
So, in September 2020, she launched Nearby, a platform of hyperlocal marketplaces where people can buy online from multiple local businesses and check out with just one cart. Nearby started with 17 stores in Oakland, California. Since then, there are now 50% more sellers on the platform, which has already made more than $100,000 in sales. The company just finished its Series A round, which brought in $21 million. This money will help the company grow into new markets.
Annie Kadavy, managing director of Redpoint Ventures, which led the round, says, “One thing I really like about April and the team is that they really focus on the problem, not on what the solution has to be.” Since Kadavy and Underwood worked together at Twitter, she says she was excited to work with her. Nearby also helps Kadavy solve a problem he was thinking about. She says, “It’s easy to see the chances for growth.” The round was made up of GV, Obvious Ventures, Moxxie Ventures, Sound Ventures, Cowboy Ventures, and Brandless’s former founder, Tina Sharkey.
Nearby makes it free for merchants to sign up and takes care of shipping and logistics. The company charges a fee for every transaction, which Underwood says is “on the floor” compared to other online marketplaces where fees and shipping costs can cause businesses to lose up to 30% of their profit margins. Austin, Texas, and Charleston, South Carolina, will host the next Nearby marketplaces. Based on how many suggestions were made on the website for the platform, the company chose these cities. Each new place will have its own website and a group of local employees.
So far, 120 places in the U.S. and other countries have been put forward, including Olney, Maryland, which applied with the help of 50 people working together.
Underwood is not surprised that people in their area are begging for Nearby. Even though people spent more money online because of the pandemic, the move to the Internet was inevitable. These same shoppers want more options than Amazon, preferably ones that help local businesses.
Sitecore did a survey, and the results showed that 40% of people want to spend less on Amazon, and more than half of Generation Z wants to spend less on the site overall. Nearby grew at the same time that the number of small businesses was going up. In 2020, more than 4.3 million new businesses asked the IRS for Employee Identification Numbers. This is 18% more than in 2019 when only 3.5 million did so. This is likely to keep going until 2021 since more than 440,000 new businesses started up in March alone.
Underwood says that it should be easy for business owners, both new and old, to get their businesses online. The goal for businesses that are already open is to get more customers. She says, “We’re really growing the pie, and we’re not just adding customers they already have.” We are also very excited to meet all the new businesses that will be building their audience for the first time.
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