The social network’s chief exec, Tyrone native Sarah Friar, was previously the CFO of Square.
Nextdoor, the social network led by Irishwoman Sarah Friar, is going public through a merger with a blank-cheque firm.
It’s a deal that values the San Francisco-based company at $4.3bn.
In its announcement yesterday (6 July), Nextdoor said it would merge with a special purpose acquisition company sponsored by VC firm Khosla Ventures.
It added that the planned merger would generate around $686m in gross proceeds for Nextdoor. This includes $270m in a private investment from funds and accounts advised by T Rowe Price Associates, Baron Capital Group, Dragoneer and others.
A special purpose acquisition company, or SPAC, is a blank-cheque shell company listed on a stock exchange, which is created to merge with a private company and take it public in the process. It’s a type of deal that has grown in popularity this year as it can be quicker than the traditional IPO route.
This deal is expected to close in the fourth quarter of the year and Nextdoor will be listed on the Nasdaq stock exchange under the ticker KIND.
‘Hyperlocal’ social network
Nextdoor is a social network focused on connecting neighbourhoods. The platform, launched in 2011, allows users to organise events and provide information and alerts about things happening locally.
It’s a network that attracted attention during the pandemic – for both good and bad reasons.
The company says its platform is now used in more than 275,000 neighbourhoods around the world and nearly one-third of households in the US.
“Nextdoor has been at the forefront of cultivating ‘hyperlocal communities’ and neighbourhoods since its inception, allowing neighbours to create meaningful connections – both online and offline,” Friar said in a statement yesterday.
“Our business strengthens as we scale, benefitting from strong network effects, and we believe the proposed transaction with [the SPAC] accelerates the growth potential of our platform.”
Friar, who is originally from Tyrone, has been a big name in the Silicon Valley tech scene for many years. She was CFO of Jack Dorsey’s fintech business Square and was added to the board of Slack in 2017.
She went on to become CEO of Nextdoor in 2018 and at the time was tipped to help the social network go public.
In an interview with CNBC yesterday, Friar said the SPAC deal would “bring in a lot of proceeds”, helping the company expand into new territories.
She added that it will continue investing in small businesses and in its proprietary ad tech, which will support monetisation and revenue streams. As well as expanding monetisation, Nextdoor’s growth plans include hiring and product development.