What Investors Look for in a Hyperlocal Startup | Street Fight


What Investors Look for in a Hyperlocal Startup

2 Comments 04 June 2013 by

investorsThe hyperlocal industry has seen a spurt of big funding news over the past few months with companies like Booker and FoodPanda nabbing double digit rounds. During an afternoon panel discussion at Street Fight Summit West in San Francisco today, Alex Ferrara of Bessemer Venture Partners and Sharon Wienbar, a partner at Scale Venture Partners, looked at some of the recent investments, and broke down the way in which they approach investing in the local space. The panel was moderated by FixYa’s new chief revenue officer, Lem Lloyd.

“It’s a little bit iterative for us,” said Wienbar about the venture firm’s approach to investing in hyperlocal. She said that their firm looked at megatrend opportunities that propagate across four internally-defined broad customer categories. “We understand the fundamentals of the technology [that is being pitched] and how they will affect each of those categories of buyers,” she added.

TT3_1836One area that has seen a renewed emphasis is scheduling. Ferrara framed scheduling as an entry-point that allows businesses to offer broader capabilities such as CRM. In effect, businesses, whether they are local or national, can upsell products once they have established identification characteristics for their customers.

The panelists also touched on the verticalization of web traffic. Unlike Google and Facebook, which dominate across a number of verticals, Wienbar pointed out that traffic amongst online hyperlocal sites is segmented. For example, Yelp specializes in restaurants and bars while Zillow specializes in real estate listings.

Both Ferrara and Wienbar however, were skeptical of NextDoor, the neighborhood network that raised a whopping $21.6 M round from a group led by Greylock Partners in February. Ferrara termed NextDoor’s value proposition as “incredibly difficult,” and Wienbar said the concept was hard to scale: “You have to be broad and, also, deep in several locations at the same time,” she said.

However, Ferrara said the intersection of open government with hyperlocal, which sites like now-shuttered EveryBlock have pursued, might be an interesting area of innovation in the future. “Combining the social and community features from popular sites such as Reddit and Twitter with open government really has potential,” he said.

While local has remained an elusive market for small and big players alike, investors are always on the lookout for innovative plays. Even in an era of redoubled marketing efforts and daily deals by local businesses, customer churn remains high. “We are always looking out for companies or areas we track closely to see if someone can crack the code for consumer engagement at the local level,” said Ferrara.

Street Fight Summit 2013 is coming soon to NYC. Find out what’s happening and how you can get a seat at Street Fight’s flagship event here.

  • OmahaNews.com

    Hyperlocal success; whether it be in news delivery, goods, or services, hinges upon intimacy with and within individual, local markets. This is why we continue to see broad-based efforts fail time and time again. If I were a deep-pocketed VC, I’d find a proven, locally-focused and managed business model, and then do the virtual equivalent of franchising. If the parent company has done a great job of recruiting franchisees, they’ll presumably have hundreds of locally engaged, highly skilled, and forward thinking local owners (as opposed to employees) in their respective local markets; the growing concern will then have a vast pool of committed stakeholders from which to draw feedback.

    • locable_brian

      We couldn’t agree more. While we specialized in working with legacy publishers we’re piloting a hyperlocal program that still uses our Community Content Engine (CMS) and revenue approach.

      I invite you, OmahaNews.com and others to apply at http://locable.com/publishers/locable-for-hyperlocal-publishers/

Denver — March, 5th, 2015
Learn from the pros, network with partners and clients, and ski! Don't miss our second annual event on this important topic.
Register now and save!


Get hyperlocal industry headlines in your inbox every morning. Subscribe to the Street Fight Daily newsletter.

See how brands compare in local presence across areas such as local SEO, data accuracy, social engagement and more. Presented by Where2GetIt and Street Fight. Click here to see the battle!

Free White Paper: Contextualization

Learn how to deliver better, revenue-driving consumer experiences. Download "Contextualization: Leveraging Location-Based Technology and Mobile to Drive Success for Brands."

Sponsored by Artisan Mobile.

Follow Us

Get the latest Street Fight news, information and analysis via Twitter and Facebook.

The Commerce Graph

The “Commerce Graph” is a new framework we have developed to think about the future of physical exchange. The model offers an alternative to the dominant narrative about the commerce landscape that frames digital networks as an adversary of physical exchange.

The $20 Billion Mobile Marketing Opportunity

Strategies and insights into the landscape of targeting options and how they deliver foot traffic and sales for SMBs.
Check out our 2013 report and get your copy today!


© 2015 Street Fight.

Powered by WordPress. Hosting by Page.ly