Consumer data company Near Intelligence Inc. has filed for Chapter 11 bankruptcy protection less than a year after going public. The Pasadena-based company will sell nearly all of its assets to credit institution Blue Torch Finance LP and plans to continue normal operations through the bankruptcy proceedings.
Near went public in March via a business combination with special acquisition company KludeIn I Acquisition Corp., a deal that was based on Near’s pre-money enterprise valuation of $575 million at the time. The company later received notice in mid-November that, as a result of failing to file its third-quarter financial report in a timely manner, it was not in compliance with the Nasdaq’s listing rules. It was officially suspended from trading on the Nasdaq on Dec. 27 and is now trading on OTC Markets Group under the ticker “NIRLQ.” Its stock closed on Thursday at less than 1 cent a share.
Near was founded by former chief executive Anil Mathews in 2012 and uses a combination of consumer data and artificial intelligence to provide partnering businesses with insights into consumer behavior and trends. Mathews told the Business Journal in April that about 87% of its income is recurring and comes from licensing its products. However, Near stated in its Chapter 11 filing that it had struggled in recent years to raise sufficient capital to cover operational costs and that recent enactment of stricter data-privacy regulations have changed the industry and made it increasingly difficult for data-intelligence providers to gather information. The company accrued approximately $100 million in net losses in 2022.
“Competition in the data intelligence industry is robust and the market is saturated with competitors who are constantly developing new technologies and products for more efficiently gathering, cataloging and updating data,” the filing said. “(Near’s) inability to maintain the quality of their products in accordance with industry standards has led to difficulties in retaining and obtaining customers, as customers have numerous firms to turn to for their data intelligence needs.”
Blue Torch will acquire the company for a credit offering of at least $50 million. According to its Chapter 11 filing, Near has $96 million in funded debt, in addition to $16 million of debtor-in-possession financing.
Mathews and Near’s chief financial officer, Rahul Agarwal, were terminated from the company in November based on an investigation into allegations of financial mismanagement and potential fraudulent actions. Mathews later filed a statement of claim against Near alleging defamation, breach of contract and “intentional and negligent interference with prospective economic relations.” Near said that it intends to pursue claims against Mathews and Agarwal during the Chapter 11 case, though it did not specify what this would entail.
Gladys Kong, who previously served as Near’s chief operating officer, was appointed as chief executive in November.
The bankruptcy court will hold a hearing on Jan. 5 to consider bidding procedures in connection with the sale of Near’s assets.