Nextdoor SPAC

Rebecca Cattlin
By :  ,  Senior Financial Writer

Nextdoor SPAC: When will Nextdoor go public?

Nextdoor is expected to go public via a SPAC deal in Q4 2021, at which point it will be listed on the Nasdaq under the ticker symbol ‘KIND’. The company is expected to bring in $686 million in gross proceeds that will help fuel expansion plans.

Discover what a SPAC is and how it works

What SPAC is merging with Nextdoor?

Nextdoor is merging with Khosla Ventures Acquisition II. Khosla has $270 million in private investment in public equity (PIPE) lined up, which it’s collected from institutions such as T. Rowe Price, Baron Capital and ARK Invest.

How much is Nextdoor worth?

Nextdoor is estimated to be worth $4.3 following the merger with Khosla, in which its shares are thought to be priced at $10 before the deal closes.

The company has raised approximately $470 million in previous funding rounds and was given a valuation of $2.2 billion in 2019. The growth is thanks to Covid, which saw people using Nextdoor to connect to neighbours amid stay-at-home orders.

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How to trade Nextdoor with

Once Nextdoor has listed, you can trade its shares in the same way you would any other company on the market.

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What does Nextdoor do?

Nextdoor is an online platform, created in 2011, that connects neighbours and allows people create events, spread awareness of dangers, and just share general information to local users. Currently, Nextdoor operates in over 275,000 neighbourhoods around the world, with over 27.6 million weekly active users, and is found in a third of US households.

The app has typically been used for local business postings, including babysitters and dog walkers, but it became popular amid the coronavirus pandemic as a means of connecting with neighbours, particularly the vulnerable who needed assistance shopping. Nexdoor even launched a ‘Help Map’ tool that enabled users to indicate they’re in an area and available to assist others.

Is Nextdoor making money?

Nextdoor makes money the same was as most social networks, through advertising. Typical advertisements on the platform include small and medium-sized businesses looking to appeal to local clientele.

Nextdoor does hold a product listings page and claims that every month it lists goods worth $2 billion but it doesn’t charge for these listings – the company is thought to be looking at monetisation options.

Is Nextdoor profitable?

No, Nexdoor is not currently profitable. It has forecasted EBITDA losses of $50 million for the next few years. In 2020 it generated $123 million in revenue, with a prediction of reaching $249 million by 2022 – a 40% growth rate.

These revenue figures are considered quite small given the company is now ten years old and is expected to have a $4.3 billion market cap.

What is Nextdoor's business strategy?

Nextdoor’s business strategy is based on expanding into new territories and creating more content for the platform. CEO Sarah Friar – previously CEO of Square – has said that they’ll continue to invest in small businesses and advertising technology to boost monetisation and revenue.

Nextdoor intends to use the capital it raises from its SPAC to fund this strategy, employing more staff and investing in products that will drive engagement.  

Currently, retaining users is one of the main issues facing the as nearly half of new users stop using the platform regularly within two years according to daily and monthly active user (DAU/MAU) data. However, Nextdoor still boasts better engagement metrics than bigger rivals such as Instagram, Twitter and Pintrest. Nexdoor also plans to grow international engagement, with just 9 million international users.

The company has also faced criticism for racist comments on its platform, which has caused it to be included in the conversation of regulation of social media giants such as Facebook and Twitter. Nextdoor tried to solve the issue by deputising unpaid moderators to delete objectionable content but this was deemed a failure too after the moderators began to delete comments sympathetic to the Black Lives Matter protests.

Board of directors of Nextdoor

Nextdoor’s board of directors and board observers include:

  • Sarah Friar, CEO at Nextdoor
  • Bill Gurley, General Partner, Benchmark
  • John Hope Bryant, CEO, Operation HOPE Inc
  • Leslie Kilgore, Former CMO, Netflix
  • Mary Meeker, Co-Founder and General Partner, BOND
  • Jason Pressman, Managing Director, Shasta Ventures
  • David Sze, General Partner, Greylock Partners
  • Nirav Tolia, Co-Founder, Nextdoor
  • Chris Varelas, Co-Founder and Managing Partner, Riverwood Capital
  • Andrea Wishom, President, Skywalker Holdings LLC

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