Nextdoor, an online social network for neighbors, said it has attracted $60 million from early backers of technology titans Google, Amazon and Facebook.
The new investment, led by venture firm Kleiner Perkins Caufield & Byers and investment firm Tiger Global Management, values Nextdoor at more than $500 million, said a person familiar with the matter.
Nextdoor members make Facebook-style postings, giving or seeking recommendations for services such as babysitters and yard maintenance or local retailers and restaurants. They also post about community issues such as parking; crime and safety; or items for sale or loan.
The investment sum underscores the appeal of businesses that can tap into the burgeoning use of mobile devices, as well as social networking. Perhaps the best current example is Twitter, which is preparing for an initial public offering that values the company at up to about $11 billion.
“We’re all spending more time with our screens, more engaged, but I think data shows we’re less connected,” said John Doerr of Kleiner Perkins, citing his own experience of knowing few of his neighbors. A Pew Research study backs him up.
Nextdoor, with its ability to introduce neighbors to each other, helps people regain the sense of connection, he said.
Doerr, an early investor in Google and Amazon, is becoming a special adviser to the service.
Enlisting new investors was more about tapping into expertise than needing cash, said chief executive Nirav Tolia, although the funds will help as the service expands internationally.
Early next year, Nextdoor plans to expand to Canada, followed by Great Britain, Australia, and South Africa, Tolia said. He sees Tiger Global, which he said helped companies such as LinkedIn grow internationally, as particularly valuable in that area. Tiger invested early in Facebook.
While Nextdoor does not yet have revenue after two years of operations, Tolia said he is not worried, citing the example of businesses such as Twitter.
“If we look at the great companies at this stage, none of them started to monetize this early in their evolution,” Tolia said. “It’s all about getting the product right.” Eventually, Nextdoor plans to tap into local advertising, he said.
Nextdoor is currently used in 22,527 neighborhoods across the United States, up from 5,694 a year ago. Including the latest funding round, it has raised just over $100 million.
(Reporting by Sarah McBride; Editing by Ken Wills)