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Nextdoor’s SPAC investor deck paints a picture of sizable scale and sticky users
The SPAC parade continues in this shortened week with news that community social network Nextdoor will go public via a blank-check company. The unicorn will merge with Khosla Ventures Acquisition Co. II, taking itself public and raising capital at the same time.
Per the former startup, the transaction with the Khosla-affiliated SPAC will generate gross proceeds of around $686 million, inclusive of a $270 million private investment in public equity, or PIPE, which is being funded by a collection of capital pools, some prior Nextdoor investors (including Tiger), Nextdoor CEO Sarah Friar and Khosla Ventures itself.
Notably, Khosla is not a listed investor in the company per Crunchbase or PitchBook, indicating that even SPACs formed by venture capital firms can hunt for deals outside their parent’s portfolio.
Per a Nextdoor release, the transaction will value the company at a “pro forma equity [valuation] of approximately $4.3 billion.” That’s a great price for the firm that was most recently valued at $2.17 billion in a late 2019-era Series H worth $170 million, per PitchBook data. Those funds were invested at a flat $2 billion pre-money valuation.
So, what will public investors get the chance to buy into at the new, higher price? To answer that we’ll have to turn to the company’s SPAC investor deck.
Our general observations are that while Nextdoor’s SPAC deck does have some regular annoyances, it offers a clear-eyed look at the company’s financial performance both in historical terms and in terms of what it might accomplish in the future. Our usual mockery of SPAC charts mostly doesn’t apply. Let’s begin.
Nextdoor’s SPAC pitch
We’ll proceed through the deck in its original slide order to better understand the company’s argument for its value today, as well as its future worth.
The company kicks off with a note that it has 27 million weekly active users (neighbors, in its own parlance), and claims users in around one in three U.S. households. The argument, then, is that Nextdoor has scale.
A few slides later, Nextdoor details its mission: “To cultivate a kinder world where everyone has a neighborhood they can rely on.” While accounts like @BestOfNextdoor might make this mission statement as coherent as ExxonMobil saying that its core purpose was, say, atmospheric carbon reduction, we have to take it seriously. The company wants to bring people together. It can’t control what they do from there, as we’ve all seen. But the fact that rude people on Nextdoor is a meme stems from the same scale that the company was just crowing about.
Underscoring its active user counts are Nextdoor’s retention figures. Here’s how it describes that metric:
Image Credits: Nextdoor SPAC investor deck
These are monthly active users, mind, not weekly active, the figure that the company cited up top. So, the metrics are looser here. And the company is counting users as active if they have “started a session or opened a content email over the trailing 30 days.” How conservative is that metric? We’ll leave that for you to decide.
The company’s argument for its value continues in the following slide, with Nextdoor noting that users become more active as more people use the service in a neighborhood. This feels obvious, though it is nice, we suppose, to see the company codify our expectations in data.
Nextdoor then argues that its user base is distinct from that of other social networks and that its users are about as active as those on Twitter, albeit less active than on the major U.S. social networks (Facebook, Snap, Instagram).
Why go through the exercise of sorting Nextdoor into a cabal of social networks? Well, here’s why:
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Not on Nextdoor? You can still grab your neighbors’ stuff on Free Finds
Nextdoor, the app that helps neighbors connect, launched a new feature called Free Finds today, which will help people browse the free items available in their neighborhoods. Since the start of 2020, monthly listings to buy, sell and give away items on Nextdoor have increased by 80%, but 25% of these listings advertised free stuff. So, the company decided to create a more streamlined way to get the word out about cool, free stuff on the curbs of your neighborhood.
You don’t have to be a member of Nextdoor to scroll through the free listings. Typically, becoming a member can be a complicated process that requires you to verify your home address via snail mail. But now, whether you’re looking for a free blender or seeking your next trash-to-treasure upcycle project, you can browse what’s up for grabs in your neighborhood.
To contact the seller, you need to set up a free account and go through the standard Nextdoor sign-up process. If your cell service billing address is at the same address where you live, the sign-up process is quick — you can verify your address via text. But, if the addresses don’t match (read: if you’re still on your parents’ family plan), it can take up to 10 days to receive an invitation letter to become a verified Nextdoor member. By then, that lightly worn pair of boots might be long gone.
If you live in a densely populated area, you can probably find a neighborhood “free and for sale”-themed group pretty easily on Facebook. But, at the outset, Nextdoor adds a level of functionality by filtering items into categories, like “for young ones,” “for plant parents,” “spoil your pets” and “hidden treasures.” It could also appeal to those who don’t want to deal with browsing through multiple Facebook groups, including those that stretch beyond their neighborhood to nearby areas that would require a commute.
Nextdoor emphasizes the environmental benefits of a feature like Free Finds, which can help neighbors reduce waste when they discard perfectly usable items — instead, they can share resources with their neighbors. But more broadly, Free Finds is about leveraging people’s interest in free stuff to grow Nextdoor’s user base.
It also comes at a time when Facebook is threatening Nextdoor more directly. The tech giant launched its Neighborhoods feature in Canada last month, which is an obvious Nextdoor clone (Facebook copying other social media apps? Stop me if you’ve heard this one before). The feature should roll out soon for U.S. users.
Over the last year, Nextdoor has launched multiple initiatives that aim to support communities, like Sell for Good, which allowed users to sell items on the social network and donate proceeds to nonprofit causes. In response to the coronavirus outbreak, it also added features like Help Maps, Groups, a fundraising option for local businesses and a neighborly assistance program created with Walmart.
Still, some consumers have become understandably skeptical of neighborhood-based social media apps. The “Black Mirror”-adjacent crime-reporting app Citizen recently came under fire when its CEO Andrew Frame bribed users with $30,000 to catch an arsonist using the app’s new livestreaming service, but had targeted the wrong person. Nextdoor, meanwhile, had in the past developed such reputation for racial profiling that the company eventually had to roll out special tools to address this. Today, it still faces accusations of allowing unneighborly behavior, including political discussions and other posts that can make minority groups feel unwelcome or even unsafe.
Ultimately, investing in new products that encourage the opposite behavior — neighbors helping neighbors, as Free Finds offers — can only go so far to combat the app’s reputation.
The new Free Finds feature is live today in all the countries where Nextdoor operates at either nextdoor.com/freefinds or by visiting the Nextdoor Finds section in the Nextdoor app.
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Nextdoor launches Sell for Good for easy donations to local nonprofits
Nextdoor is launching a new feature called Sell for Good, allowing users to sell items on the neighborhood-focused social network and donate the proceeds to local nonprofits.
CEO Sarah Friar said that since the pandemic started, conversations about donations have increased 7x on Nextdoor .
“Communities are hurting,” Friar said. “People are looking to go donate, but things like Goodwill and so on are closed.”
At the same time, nonprofits are struggling. Pointing to a recent survey from the Nonprofit Finance Fund, she explained, “A lot of them depend on in-person events — the race that you might do, the book drive they always have, all of that has dried up.”
One way to support those nonprofits is to sell goods (perhaps the very same goods you were planning to give to Goodwill) on Nextdoor’s For Sale and Free section and then donate the money from the sale. In fact, Product Manager Rhett Angold said that users have already been doing this — for example, someone in Berkeley raised thousands of dollars for a local animal shelter by selling homemade masks.
So Sell for Good is designed to make this process as straightforward as possible. Nextdoor has partnered with the PayPal Giving Fund to support nonprofits in different cities, including A Better Chicago, LA Voice, New York Cares, Operation HOPE, Spark, The Hidden Genius Project and ViBe Theater Experience.
Sellers can choose which organization to support, then their sale will be identified as a donation. Once an item has been purchased, the seller can approve the donation and they’ll receive a receipt for their tax-deductible contribution.
And while the feature currently donates the full sale proceeds (minus the “typical PayPal processing fees”), Angold said his team is working on giving sellers the ability to donate a smaller portion as well.
Sell for Good is currently available to all Nextdoor users in the United States.
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Nextdoor and Walmart partner on a new neighborly assistance program
Neighborhood social network Nextdoor and Walmart are teaming up today to launch a new “Neighbors Helping Neighbors” program that will make it easier for vulnerable community members to get assistance from neighbors who are already planning a trip to Walmart. The new in-app feature will allow Nextdoor users to post to groups associated with their local Walmart store to request shopping assistance.
To find the new option, Nextdoor users can either use the Nextdoor website or mobile app.
From there, users will click on the “Groups” tab where they’ll see local Walmart stores pinned to the top of the page. Members can then post a message to the group feed where they can ask for help or offer to help others.
Members who connect in the feed can then work out the details on the message board or through direct message, where they can share more private details like their address and what they need from the store.
The feature is designed to help elderly, high-risk or other vulnerable members find someone who will pick up groceries, medications or other essentials when they’re planning a trip to the store.
This could also offer a low-cost alternative to using online grocery delivery services, which require tipping. In the case of a neighbor helping a neighbor, the assistance is offered on a volunteer basis, not as someone’s job. That could be potentially life-saving for low-income community members who can’t risk shopping in a store during the coronavirus pandemic, but who also struggle to afford alternatives like online grocery.
Walmart isn’t moderating or managing these Nextdoor groups, to be clear, but worked with Nextdoor to make the feature available.
For the retailer, the addition isn’t just beneficial in terms of directing customers to Walmart to shop, it’s also seen as a way to reduce the number of people who come to the store in-person.
“I’ve seen first-hand the countless ways our Walmart team is working together during this challenging time, leading with humanity, compassion and understanding to serve our customers,” said Janey Whiteside, Walmart’s chief customer officer, in a statement about the feature’s launch. “We’re continuing to do that through our new program with Nextdoor. We’re connecting neighbors to each other so that more members of our communities have access to essential items, while limiting contact and the number of people shopping in our stores,” she added.
Nextdoor has launched several new features in response to the coronavirus pandemic in recent weeks.
Its new “Help Maps” allowed members to post and offer help in their neighborhood, for example. But this feature had been buried on the “More” menu in the app and was being underutilized as a result. A dedicated place within Nextdoor Groups for these sorts of requests is more visible, making it easier to offer assistance or to ask for help.
Over the past few weeks, Nextdoor says it has seen a 7x increase in people joining groups to help one another, a not surprising figure given its recent exit from beta.
Nextdoor will also make the Walmart groups easy to find by pinning them to the top of the Groups tab, it says.
Meanwhile, Walmart store locations and hours where “Neighbors Helping Neighbors” is available can be found on Nextdoor’s “Help Map.”
“We’re inspired everyday by the kindness of people around the world who are stepping up and helping out. In recent weeks, we’ve been blown away by the number of members who have raised their hand to run an errand, go to the grocery store, or pick up a prescription for a neighbor,” said Sarah Friar, Nextdoor CEO, about the feature. “We’re grateful for Walmart’s partnership to make this important connection between neighbors around vital services, and we’re proud to come together to ensure everyone has a neighborhood to rely on,” she said.
The new initiative is launching nationwide starting today, but may not be immediately available in the app as the rollout could take time to complete.
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Symantec’s Sheila Jordan named to Slack’s board of directors
Workplace collaboration software business Slack (NYSE: WORK) has added Sheila Jordan, a senior vice president and chief information officer of Symantec, as an independent member of its board of directors. The hiring comes three months after the business completed a direct listing on the New York Stock Exchange.
Jordan, responsible for driving information technology strategy and operations for Symantec, brings significant cybersecurity expertise to Slack’s board. Prior to joining Symantec in 2014, Jordan was a senior vice president of IT at Cisco and an executive at Disney Destination for nearly 15 years.
With the new appointment, Slack appears to be doubling down on security. In addition to the board announcement, Slack recently published a blog post outlining the company’s latest security strategy in what was likely part of a greater attempt to sway potential customers — particularly those in highly regulated industries — wary of the company’s security processes. The post introduced new features, including the ability to allow teams to work remotely while maintaining compliance to industry and company-specific requirements.
Jordan joins Slack co-founder and chief executive officer Stewart Butterfield, former Goldman Sachs executive Edith Cooper, Accel general partner Andrew Braccia, Nextdoor CEO Sarah Friar, Andreessen Horowitz general partner John O’Farrell, Social Capital CEO Chamath Palihapitiya and former Salesforce chief financial officer Graham Smith on Slack’s board of directors.
“I believe there is nothing more critical than driving organizational alignment and agility within enterprises today,” Jordan said in a statement. “Slack has developed a new category of enterprise software to help unlock this potential and I’m thrilled to now be a part of their story.”
Slack closed up nearly 50% on its first day of trading in June but has since stumbled amid reports of increased competition from Microsoft, which operates a Slack-like product called Teams.
Slack co-founder and chief technology officer Cal Henderson will join us onstage at TechCrunch Disrupt San Francisco next week to discuss the company’s founding, road to the public markets and path forward. Buy tickets here.
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Nextdoor adds new funding, closes growth round at $170M with $2.1B valuation
Social networking platform for neighbors Nextdoor today announced it has secured additional funding to close out its $170 million growth round. The new financing includes the $123 million Nextdoor raised in May from new investor Riverwood Capital along with existing investors Benchmark, Tiger Global Management and Kleiner Perkins. The additional funding announced today comes from tech investment firm, Bond.
As a result of the new investment, Mary Meeker from will join Nextdoor’s board.
As of the May 2019 round, Nextdoor was valued at $2.1 billion for its neighborhood-level networking platform, which today generates revenue from sponsored posts and its real estate vertical for local agents. The company had said it was on track to double its revenue in 2019.
We understand the valuation remains at $2.1 billion, even with the additional funding.
Since its 2010 founding, the Nextdoor platform has grown to more than 247,000 neighborhoods across 10 countries. Its international growth potential appears to be of interest to Meeker, as does the verification process Nextdoor uses to ensure its users actually live in the neighborhoods they join.
This is not how Facebook’s Groups product works, where verification is left up to individual Group admins. That results in neighborhood groups filled with people who are just looking to research the area, those who used to live there but have since moved, businesses looking to advertise to locals, people who live nearby but don’t have a neighborhood group of their own and various other non-neighbors.
“Nextdoor has proven itself as the leader in local connectivity. Nextdoor is built on trust — verifying each members’ name, address and neighborhood — which creates the transparency and accountability that is core to building communities,” Meeker said. “Nextdoor is connecting people to the information and services that matter most, and I am excited to work with this impressive team to help expand Nextdoor’s local utility as well as it’s growing global footprint,” she added.
In recent months, Nextdoor has also grown its team, with new hires Antonio Silveira as its head of engineering; Tatyana Mamut, head of product; Bryan Power, head of people; and Craig Lisowski, head of data, information systems and trust.
“We could not be more thrilled to welcome Bond to our family of investors. Mary Meeker has been a strong supporter of Nextdoor for many years and is deeply knowledgeable about consumer technology,” stated Sarah Friar, CEO of Nextdoor, in a statement. “At Nextdoor, we believe that change starts with each of us opening our front doors and building deeper connections with the people nearest to us: our neighbors. We’re thrilled and honored to partner with all of our forward-looking investors to catalyze neighbors’ ability to connect with relevant local conversations, organizations, and businesses, engage in real-world interactions, and unlock the global power of local.”
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Nextdoor CEO is stepping down
Nirav Tolia, CEO of Nextdoor, is stepping down from his role, Recode reports. For those unfamiliar with the company, Nextdoor is like a social network for your neighborhood. Though, over the years, there has been controversy around Nextdoor’s role in promoting racial profiling. Nextdoor later rolled out a new tool to address some of the issues around racial profiling.
In an email sent to the team today, Tolia said he’s starting to look for his replacement and once that happens, he will move into an active chairman role on the board, according to Recode.
Here’s a nugget from the email, obtained by Recode:
Yet as Nextdoor evolves, the role of the CEO needs to evolve as well. The size of our footprint is growing larger and our organization is growing more complex. The time is right to find the next CEO for Nextdoor. With our board of directors, I will be leading the search to recruit a proven operator who can take our company to the next level. We will take our time to find the right person, so this process will likely take several months. During that period, I will continue to lead as CEO. When the next CEO is selected, I will become Chair of the Board where I will continue doing whatever I can to help us succeed.
Nextdoor raised $75 million at a $1.5 billion valuation last December, followed by an expansion into France in January.
Update: The company has since posted on its blog the full email:
Just over eight years ago, I was blessed to be part of a group of seven friends who conceived of the idea behind Nextdoor. We were a tight-knit, ambitious group of co-founders who believed deeply in the power of community and dedicated ourselves to helping neighbors everywhere create stronger, safer, happier places to call home.
It is amazing to see how this simple but powerful mission has inspired the company that Nextdoor is today. That first year, we worked tirelessly to convince 176 neighborhoods to adopt our platform. Since then, we have grown more than 1000X – we now serve over 200,000 neighborhoods across five countries – including nearly 90% of all neighborhoods in the U.S.
All of this has been made possible by the passion and hard work of each of our employees. Their dedication and commitment energizes me every single day. I’ve never been more excited about our team, including our recent additions of Chief Financial Officer and Chief Legal Counsel. It has been the honor of a lifetime to lead this company as CEO.
Yet as Nextdoor evolves, the role of the CEO needs to evolve as well. The size of our footprint is growing larger and our organization is growing more complex. The time is right to find the next CEO for Nextdoor. With our board of directors, I will be leading the search to recruit a proven operator who can take our company to the next level. We will take our time to find the right person, so this process will likely take several months. During that period, I will continue to lead as CEO. When the next CEO is selected, I will become Chair of the Board where I will continue doing whatever I can to help us succeed.
The future is exceptionally bright for Nextdoor. We’ve never been more well-positioned to achieve our potential, both as a business and force for good in the world. Thank you for the last eight years, this has been one of the best experiences of my life. I will always be inspired by the amazing opportunity – and worthy mission – that makes our company truly special.
With gratitude,
Nirav
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Dolo delivers on the Foursquare prophecy of hyper-local tips
Dolo is the kindness of strangers as an app. Where’s the prettiest place in the park? What’s the best thing on the menu? How do I skip the line? Dolo lets you leave helpful suggestions for anyone nearby. The new social app launches out of beta today to augment the world with serendipitous tips from strangers. Built by two ex-Apple employees and backed with pre-seed funding from Floodgate, Dolo could reveal the secrets and potential friends hidden in the ether around us.
Like any new social app, Dolo will have a steep uphill climb to user growth. There are also apps like Foursquare, guide books like Lonely Planet and social networks like Facebook and its Recommendations feature to compete with. But they’re often bloated, outdated or unfocused. Dolo hopes to build a new community around turning the whole world into a bulletin board.
“If you take the construct of a cocktail party or a neighborhood bar, people feel more naturally ‘allowed’ to just mingle, eavesdrop, start a conversation or even meet someone new,” says Dolo co-founder and CEO Raja Haddad. “In larger spaces (a park, a neighborhood, a city), there are no vehicles today that allow such frictionless, comfortable, fun socializing.” That means a local expert’s knowledge ends up trapped while tourists and first-timers wander aimlessly.
Haddad and co-founder Benjamin Vigier met when they joined Apple in 2010 and worked on its Apple Store App before Haddad move on to Apple Watch marketing and Vigier helped develop Apple Pay. They later met Andy Mai at Coachella, who grew the Men’s Fashion Advice subreddit to more than a million users. Together they set out “to enable serendipitous ways for people to socialize with other people around them, regardless of their pre-existing social bubbles.”
Dolo’s iOS and Android apps are now open everywhere, but it’s currently focusing on the San Francisco Bay Area, where it centered its 4,000-user beta. The app starts with a feed of the closest tips that automatically re-sort as you move around. Anyone can post that “I need some info or a favor,” “folks need to know this,” “I’m proposing an event,” or “just chatter and banter.” For example, my first contribution was that you can skip the line at famously overpopulated ice cream shop Bi-Rite Creamery by walking down the block to its soft-serve froyo window near SF’s Dolores Park.
That popular hipster picnic spot is actually where Dolo gets its name. And no, it’s not the same as the now defunct “bespoke app” called Dolo from 2013 that just helped you locate your friends in that park.
I was impressed by Dolo’s approach to safety and moderation that other anonymous and hyper-local apps like Yik Yak and Secret neglected until bullying led to their demise. You can use your real name or a pseudonym on Dolo, and choose a pixelated filter or mask sticker to obscure your face from the public. But then if you connect as friends with someone on the app, “the masks come off,” Haddad says, and your profile’s bio is revealed. Meanwhile, users are empowered to moderate comments on their own posts by getting alerted to flags that Dolo reviews too. And all photos get reviewed by a crowdsourced moderation service.
Dolo smartly plans to “focus on achieving density versus going directly for top-line scale,” Haddad explains. That mirrors Facebook’s growth strategy that tried to get lots of users at specific colleges or locations so they don’t enter a ghost town, rather than immediately striving for global scale. It’s already raised $680,000 in a pre-seed round a year ago, but will try to raise a seed round early this summer. It hopes to put that cash into product development, and marketing activations at colleges and public places in the fall.
Advertisers might be keen to reach potential customers when they’re super close-by and looking for local information. But that will require plenty of users, as well as a tough-to-scale local ads sales team. Haddad admits, “It’s obviously very challenging to get a social platform off the ground, particularly one that relies on location and density.”
Nextdoor has at least proven that people are interested in local info, given it’s active in 160,000 neighborhoods. The question is if an app designed to alert you to what’s around you anywhere, rather than just close to home, will have the same legs. Dolo will also have to outlast specialized apps like Wildfire for celebrity sightings and safety alerts, Citizen for crime mapping and Hive Social for interest-based communities.
It’s somewhat depressing, but an app like Facebook that already has ubiquity, frequent use and local ad relationships might be better equipped to build this product than a startup. Dolo will have to figure out how to make adding and observing tips a constant enough behavior that users don’t forget about it.
But at least Dolo isn’t burdened by a hundred other features crowding out the local recommendations for attention, nor is it constrained by relying on your existing friend graph. A dedicated app for the insights of passersby holds the promise of not only illuminating what’s around us, but also mending our polarized society.
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Nextdoor turns to real estate listings for monetization
Nextdoor, the social media platform for neighborhoods, is rolling out a real estate listings feature, showcasing housing for sale in local communities. The idea is to formalize behavior that’s been happening organically. The feature isn’t just for those looking to buy homes — it also aims to help users assess the changing real estate prices in their respective communities. Read More
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In what is being billed as a “multi-million pound” acquisition, San Francisco-headquartered Nextdoor is purchasing the “assets” of U.K. local social network Streetlife.