Nextdoor, a 5-year-old social network based on geographical proximity, is raising $110 million, which will give it a $1.1 billion valuation. Nextdoor has spent the last half-decade building its network, which aims to connect people who live close to one another. The idea is similar to Yik Yak, except that members on the network aren’t anonymous; instead, they must verify their names and home addresses. Nextdoor hasn’t disclosed how many people are on its network, which contains some 53,000 “microcommunities” in the U.S.
Apparently satisfied that it has built the network out to critical mass, Nextdoor is now focusing on monetization. The company plans to mine the 5 million or so messages that are sent on the network each day to produce “recommendations” (a.k.a. ads) for local businesses, including handypeople, housecleaning services and tutors, according to the report. That would pit Nextdoor against competitors like Angie’s List, Handy and Porch.
Nextdoor is also “experimenting” with on-demand services like grocery delivery, the Times reported, which would mean it would tangle with Uber, Instacart, Amazon and Google.
That formidable gang of would-be competitors hasn’t spooked investors, who reason that Nextdoor has a unique selling proposition because its social network engenders trust among users and potential customers. Nor has the fact that others — most notably AOL with its $200 million Patch boondoggle — have tried and failed to crack the code on local advertising.
Judging by the funding round, investors also appear to be unconcerned by the fact that Nextdoor CEO Nirav Tolia faced felony charges for a hit-and-run accident last year, an incident that wags in the press were quick to deem “unneighborly.” Tolia later pled no contest to a reduced charge. Read more…