The popular neighborhood social network Nextdoor Inc. plans to go public through a merger with a blank check company sometime in the fourth quarter of 2021.
On July 6, the company announced that it will merge with SPAC (special purpose acquisition company) Khosla Ventures Acquisition Co. II. The Khosla SPAC is currently listed on Nasdaq under the ticker symbol “KVSB.” After the transaction is completed, the combined company will be listed under the ticker symbol “KIND.”
The deal will give the social neighborhood network a valuation of about $4.3 billion. The transaction is expected to bring in about $686 million in proceeds for the company, including a $270 million from private investors.
Nextdoor will use the proceeds to expand.
The proceeds from the public offering will be used to accelerate Nextdoor’s growth plans, expand into new territories, and hire more employees, the company said in a statement.
"Our business strengthens as we scale, benefiting from strong network effects, and we believe the proposed transaction with KVSB accelerates the growth potential of our platform. We remain focused on optimizing our strategy and investing in products to drive continued neighbor and organization acquisition and engagement," said Nextdoor CEO Sarah Friar.
New non-profit foundation will benefit neighborhoods
After the merger, Friar along with co-founders Nirav Tolia, Sarah Leary, and Prakash Janakiraman, and founding investor Bill Gurley, will each contribute part of their personal ownership in Nextdoor to create the non-profit Nextdoor Kind Foundation. The foundation’s mission is to provide local grants for organizations that are “doing good in their neighborhoods.”
“Whether it is to plant a garden, paint a community center, or repair the playground, we want to be there for you like you have been there for your neighborhood,” states the foundation website.
One in three U.S. homes use Nextdoor network.
Founded in the U.S. in 2011, Nextdoor’s mission is to create a network for neighbors to receive information, give and get help, and connect with businesses in their community. If you’ve lost your dog or are looking for recommendations on plumbers in your area, your neighbors can help through the Nextdoor app.
In the U.S., one in three households connects to their community through Nextdoor. The social network expanded its services into other parts of the world in 2016. Currently, over 275,000 neighborhoods around the world use the social media network to connect with the people living around them to find out what’s happening in their neighborhoods.
"Nextdoor has been at the forefront of cultivating 'hyperlocal' communities and neighborhoods since its inception, allowing neighbors to create meaningful connections – both online and offline," said Friar.
Khosla SPAC focuses on companies with high growth potential.
Venture capital firm Khosla Ventures, founded by Vinod Khosla of Sun Microsystems, manages the KVSB SPAC, which holds a trust account of about $416 million in cash.
"We have long focused on partnering with cutting-edge, category-defining companies with tremendous growth potential, strong management teams and, importantly, clearly defined missions. Nextdoor exhibits all of these qualities and more, and we look forward to continuing our partnership and accelerating Nextdoor's growth as a public company," said Khosla, managing director of Khosla Ventures.