October 29, 2013 2:10 pm

Nextdoor wins backing of prominent venture capitalist

Nextdoor, the social network for neighbourhoods, has raised a new round of funding that could value the company at about $500m and sees a legendary Silicon Valley investor take a punt that people want to get to know the girl next door.

The two-year-old company’s $60m fundraising was led by John Doerr, the Kleiner Perkins Caufield Byers partner who led the initial public offerings of Amazon and Netscape in the first dotcom boom, and Lee Fixel of Tiger Global Management.

The network, active in one in seven neighbourhoods in the US, will use the funds to expand internationally as well as at home. The site aims to connect people with their neighbours to discuss everything from local masseuses to street corner crime.

Nirav Tolia, co-founder and chief executive of Nextdoor, said there was already “incredible demand” abroad. “We see this whole notion of building safer and stronger communities is not an American thing at all, it is something all people share,” he said.

Mr Doerr said the neighbourhood was one of the “original social networks” and the site would benefit from being social, local and mobile.

The fundraising, which values the company at a little more than $500m, according to a person familiar with the matter, comes as Silicon Valley investors are once again piling into social networks.

Pinterest, the online scrapbooking site, raised $225m last week, giving it a hefty valuation of $3.8bn, a more than 50 per cent rise in its valuation in only eight months.

While Facebook’s initial poor stock price performance may have damped investor appetite, its shares have now soared over their IPO price, and Twitter is now preparing to debut in the coming weeks.

Nextdoor has grown by 400 per cent in the past year, Mr Tolia said, based on the number of new neighbourhoods on the site. Each neighbourhood is a closed social network where users have to verify their real name and address.

Tech blog

Tech blog

Dispatches from the tech world: FT experts in San Francisco, London and Taipei upload their views

But Mr Tolia acknowledged that expanding the network was harder than adding users on, for example, Facebook, as it was trying to connect people who did not already know their neighbours. To spur this growth, the company offers to send free postcards to households in a particular area to invite them to join the site.

Nextdoor has not yet begun to generate revenue but when it does, it plans to copy the moneymaking methods of Yelp, Craigslist and Eventbrite, which entails selling adverts to local businesses and classifieds.

Venture capitalists Benchmark Capital and Greylock Partners are existing investors and also put more money into the latest round. Jeff Bezos, the founder of Amazon, and Google Ventures, the internet company’s venture capital arm, are also backers.

Copyright The Financial Times Limited 2015. You may share using our article tools.
Please don't cut articles from FT.com and redistribute by email or post to the web.

NEWS BY EMAIL

Sign up for email briefings to stay up to date on topics you are interested in

SHARE THIS QUOTE