July 15, 2021
Nextdoor, a social media app for neighbourhoods, is planning on going public through a reverse merger with a special purpose acquisition company (“SPAC”) in a deal valued at approximately US$4.3 billion. This SPAC is sponsored by Khosla Ventures, a venture-capital firm. The merger is expected to close in the fourth quarter of 2021. The company will trade under the ticker symbol “KIND.”
Nextdoor is an app that acts as a bridge between people and information about their neighbourhoods. The social media network, created in 2011, is now used by more than 275,000 neighbourhoods in 11 countries. In the United States, nearly one in three households use the app. The platform allows users to organize activities or events, alert neighbours of dangerous activity and share valuable information with one another.
The merger is expected to generate US$686 million in gross proceeds for Nextdoor. Roughly US$270 million of proceeds are coming from a private placement from funds and accounts advised by T. Row Price Associates Inc., Baron Capital Group, Dragoneer and other investment firms. This merger will allow Nextdoor to expand while increasing employment opportunities and revenue-generating investment activities. Nextdoor CEO Sarah Friar noted on “Squawk on the Street” that Nextdoor is working on several ways to boost revenue outside of this merger, including activities surrounding local commerce, local businesses and unique ad formats. For example, the company has been collaborating with Moderna and Albertsons Companies grocery stores to map COVID-19 vaccine locations.
Friar noted that Nextdoor plans to continue to expand into new territories and to invest in both small businesses and in its proprietary advertising technology to increase revenue. Vinod Khosla, founder of Khosla Ventures, referred to Nextdoor as “the neighbourhood social network, just like LinkedIn is the professional network.” Nextdoor has been to said to have very strong network effects as well local online-offline effects which Khosla noted is “very rare.”
Author: Jaclyn Jesin