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Nextdoor, a neighborhood social media app, revealed on Tuesday that it will go public through a reverse merger with a special purpose acquisition company, valued at $4.3 billion. Nextdoor CEO Sarah Friar told CNBC on Tuesday, “It’s going to bring in a lot of revenues, $686 million in gross proceeds, on a genuine blue-chip set of investors” that would help fuel expansion. A private investment of $270 million from Baron Capital Group, accounts advised by T. Rowe Price Associates, and Cathie Wood’s Ark Invest are included in the agreement with special purpose acquisition company Khosla Ventures Acquisition Co II. Friar remarked on “Squawk on the Street” that Nextdoor, situated in San Francisco, will continue to expand into other countries, resulting in additional content for the site. To support its monetization and income streams, she said it will continue to invest in both small businesses and its unique advertising technologies. Users can utilize the platform, which was launched in 2011, to organize activities, warn neighbors of impending danger, and share beneficial information such as company listings or pandemic-related news. Following years of criticism for racist comments on its network, Nextdoor launched an anti-racism notification earlier this year. According to a corporate press release, Nextdoor is used in more than 275,000 communities around the world and by roughly one-third of American households. On “Squawk on the Street,” Khosla Ventures founder Vinod Khosla, who spoke with Friar, said, “Nextdoor is the neighborhood social network, just like LinkedIn is the professional network.” “Not only does [Nextdoor] have tremendous network effects, but it also has very strong local online-offline effects, which are really unique,” Khosla noted, while expressing confidence in the company’s KPIs and future development prospects. Friar, who was Square’s chief financial officer from 2012 to 2018, stated that the number of daily active users on Nextdoor increased by 50% last year. Friar noted that the company’s average revenue per user, or ARPU, increased in the first and second quarters of this year. Growing member engagement on the platform and more sophisticated ad tech platforms are driving ARPU growth, according to Friar. “Especially around local commerce, local businesses, and very unusual ad formats that you can’t get anywhere else,” she added, the company is looking on other methods to enhance revenue. On a map showing Covid vaccination placements, Friar emphasized Nextdoor’s relationship with Moderna and Albertsons Companies grocery stores. “Only Nextdoor can take that message and make it happen on a local level,” Friar said. The SPAC deal gives Nextdoor, which was named to CNBC’s Disruptor 50 list in 2015, an implied valuation of $4.3 billion. According to TechCrunch, the company was valued at just over $2 billion in September 2019. The merger between Nextdoor and Khosla Ventures’ SPAC is planned to be completed in the fourth quarter of 2021. The ticker symbol for the company will be “KIND.” — This report was supported by Reuters./nRead More

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