INTERNATIONAL – Square Chief Financial Officer Sarah Friar is leaving the electronic payments company to become the chief executive officer of Nextdoor.com, a social network for local neighbourhoods.
Square shares declined 9.2 percent in early trading in New York Thursday.
David Viniar, Square’s lead independent director and a former Goldman Sachs Group Chief financial, 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 the chief financial officer in 2012 when she was an executive at Salesforce.com.
Her hiring received applause from analysts and investors, who saw her as a driver of growth and stability at Square, where chief executive Jack Dorsey is also the leader at Twitter.
Friar isn’t a “normal” chief financial, 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 chief executive, 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 chief executive.
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 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 chief executive,” 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.
Next door, 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 chief executive 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 chief executive.
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.
“Next door 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 chief executive.