Saturday, 11 August 2012

Nextdoor’s $18.6M Funding Values Startup at Over $100M, CEO Says

Nextdoor’s $18.6M Funding Values Startup at Over $100M, CEO Says

While Facebook can help people connect to family and friends from around the world, it’s seldom used to connect folks who live on the same street. For a typical user on the social network, neighbors make up just 2 percent of friends, a Pew Research Center study found last year.
Sarah Leary, Nextdoor Social Network Co-Founder, Talks Bill Gates, Startup Advice

That’s the premise of Nextdoor, an online social network for neighborhoods that announced today it has raised $18.6 million from Benchmark Capital, DAG Ventures, Greylock Partners, Shasta Ventures and other investors. The funding values the company at more than $100 million, Nirav Tolia, the company’s co-founder and chief executive officer, said in an interview.
“There is no social network for one of the most important parts of our identities, and that’s where we live,” Tolia said.
Since Nextdoor opened to the public last fall, the site has grown to more than 3,600 neighborhoods in the U.S., roughly doubling in size every three months, Tolia said. The company has no marketing and relies on word of mouth to get users to sign up. The first time someone from a given neighborhood logs on, they’re asked to set up the boundaries of their suburb or city district in an online map and start inviting nearby residents.
The site asks new users to verify their home address by entering a credit card number or by sending them a postcard in the mail containing a code.
Tolia helped come up with the idea for Nextdoor two years ago, after a previous site he co-founded, Fanbase, didn’t grow as quickly as expected. He offered to return about $11 million raised for Fanbase from Benchmark and others investors, but they urged Tolia and his team to try something new.
While Nextdoor may eventually put ads for local shops and services on its site, it currently has no revenue. That’s a big reason for the new round of funding, which was officially closed in April and kept quiet until now. Much of the money will go towards growing Nextdoor’s staff of about 30, said Rich Barton, a venture partner at Benchmark and member of Nextdoor’s board.
“We want to make sure that we get to tens of thousands of neighborhoods,” said Barton, a serial entrepreneur who helped found Expedia, Zillow and Glassdoor. “This round is about hiring more people to get there faster.”
Nextdoor will add to its engineering team, which will help it roll out new features. Last week, the site added a “groups” tool to let community members form a neighborhood crime watch or a parenting group and hold private conversations.
“We are leaning in heavily on the crime and safety front,” Tolia said.
Recently, after Benchmark’s Barton caught a burglar on video trespassing on his driveway and entering his car, he posted the video to the Nextdoor site for his community of Madison Park, Washington. It prompted a discussion about crime and safety amongst his neighbors, he said.
“That’s a great example of how the social network of your neighborhood is really important but meaningfully different than the social network of your friends,” Barton said

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