Square is the go-to provider for ambitious, young restaurants and cafes. They're certainly looking for more stability from a provider than a part-time CEO, and that's what they have now that Friar has left.
— Jason Clampet
Square Inc. Chief Financial Officer Sarah Friar is leaving the electronic payments company to become chief executive officer of Nextdoor.com Inc., a social network for local neighborhoods. Square shares declined as much as 12 percent in extended trading.
David Viniar, Square’s lead independent director and a former Goldman Sachs Group Inc. CFO, will lead the search for Friar’s successor, the San Francisco-based company said Wednesday in a statement. Friar will stay at Square into December.
A longtime Goldman Sachs analyst, Friar joined Square as CFO in 2012 when she was an executive at Salesforce.com Inc. Her hiring received applause from analysts and investors, who saw her as a driver of growth and stability at Square, where CEO Jack Dorsey is also the leader at Twitter Inc.
Friar isn’t a “normal” CFO, Andrew Jeffrey, an analyst at SunTrust Robinson Humphrey, wrote in a note to investors. “Her leadership in many ways has been more instrumental to Square’s emergence as a true payments disrupter and impressive growth story than CEO, Jack Dorsey’s.”
Dorsey, in a tweet, credited Friar with helping steer the company through its IPO and said his sadness at her departure was outweighed by his joy that she is “finally fulfilling” her “lifelong dream” to become a CEO.
Really proud of @thefriley for taking the big step to fulfill her lifelong ambition to be a CEO. Thank you Sarah. We love you and I’m going to miss building Square with you, but I’m so happy for you. ❤️❤️❤️
— jack (@jack) October 10, 2018
Square investors viewed Friar, 45, as a disciplined executive who set ambitious financial targets, while carefully choosing areas of market expansion. Since she joined the company, Square has transformed itself from a credit-card reader for street sellers into a payments and business software tool for retailers around the globe. It has expanded into loans, food delivery, instant deposits, accounting, inventory, website building and more. In the most recent period, it reported $21.4 billion in gross payments volume.
“Friar balanced out the fact that Dorsey is a part-time CEO,” said Ivan Feinseth, Tigress Financial Partners chief investment officer. “She has helped to build a solid business that will endure as she moves on to her next opportunity.”
Square, which held its initial public offering in November 2015, has more than doubled in value over the past year as it topped Wall Street estimates. The stock declined 10 percent to $77.45 at the close Wednesday before Friar’s announcement, amid a broad sell-off in which the S&P 500 declined to its lowest level in three months.
Nextdoor, based in San Francisco, raised $75 million last December at a $1.5 billion valuation, according to Pitchbook Data Inc. Nirav Tolia, co-founder and CEO of Nextdoor, announced in July that he would step down from the executive post. Tolia wrote in a blog post that Friar is “one of the most highly regarded executives in Silicon Valley,” and was the top choice as the next CEO.
Tolia said Nextdoor aspires to follow a similar path as Square, which was approximately the same size as Nextdoor when Friar joined, and six years later has grown to more than 3,000 employees.
“Nextdoor is one of those rare companies that transcends its utility as a business and is quickly making its mark on communities here and around the world,” Friar said in a statement announcing her appointment as CEO.
©2018 Bloomberg L.P.