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Technology Stocks : Blank Check IPOs (SPACS)

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To: Glenn Petersen who wrote (3551)11/10/2021 4:20:38 AM
From: Glenn Petersen   of 3800
 
Nextdoor - the hyperlocal social media website - has completed its merger with Khosla Ventures Acquisition

Nextdoor Surges in Trading Debut

Shares of the social-networking platform for local neighborhoods jump 17%

By Meghan Bobrowsky
Wall Street Journal Co II.
Updated Nov. 8, 2021 4:42 pm ET



Users of the Nextdoor app rose during the height of the pandemic, as they sought to stay connected with their neighbors. PHOTO: MARK LIPCZYNSKI FOR THE WALL STREET JOURNAL
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Shares in Nextdoor Inc. surged Monday in their first day of trading as the free social-networking app aimed at connecting local neighborhoods began life as a public company.

The San Francisco-based company that was founded a decade ago made its name helping people scout locally for dog walkers or gripe about neighbors. During the height of the pandemic, with people stuck at home, users took to the platform to check on and stay connected with their neighbors. User numbers shot up to 58 million last year from 48 million in 2019. They grew to 63 million by mid-2021.

“More people came to the platform during the middle of an emergency, but they came and they stuck around,” Nextdoor Chief Executive Sarah Friar recently told investors.

Nextdoor has gone public through a combination with Khosla Ventures Acquisition Co. II, a special-purpose acquisition company sponsored by venture-capital firm Khosla Ventures. It is one of the latest of the many SPAC deals this year and comes as enthusiasm for such transactions has begun to wane.

Khosla Ventures valued Nextdoor at $4.3 billion in the blank-check merger, generating about $674 million in gross proceeds, including $270 million in private investments. Nextdoor was valued at roughly $2.2 billion in September 2019.

Nextdoor shares, trading under the ticker KIND, rose as high as $18.59 in morning trading. The stock closed up 17% at $13.01. Shares of the Khosla SPAC ended trading at $11.12 on Friday.

Nextdoor has a news feed that allows users to post announcements and ask questions to the community, such as searching for missing pets or informing residents about nearby events. The company requires users to register with their home addresses.

The app also includes a feature similar to Meta Platforms Inc.’s Facebook Marketplace, where users can sell furniture, clothes and some other items directly to their neighbors.

Nextdoor said it is used in nearly one of three households in the U.S. and is active in more than 280,000 neighborhoods in 11 countries.

The company, which earns money from ads and sponsored content, said sales reached $123 million last year and projected 47% year-over-year growth in 2021 and a further 40% rise in 2022. Nextdoor remains unprofitable and expects to lose $101 million this year and remain in the red in 2022. Ms. Friar told The Wall Street Journal Monday that the company is focused on growth and declined to project when it may turn profitable.

The deal with the Khosla SPAC will allow Nextdoor to hire more employees and invest in tools that will help the company continue to grow and generate revenue, the company said. Ms. Friar said the company expects hybrid work will allow it to attract talent from across the globe to help deliver growth.

Nextdoor recently has been growing abroad more quickly than in the U.S., and Ms. Friar told investors that the company plans to build on that momentum. “We absolutely think that 2022 is a year when we start to go broader,” she said.

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Write to Meghan Bobrowsky at Meghan.Bobrowsky@wsj.com

Copyright ©2021 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8

Appeared in the November 9, 2021, print edition as 'Nextdoor Surges In Market Debut.'

Nextdoor Surges in Trading Debut - WSJ
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