Co-founder Sarah Leary talks about what's coming for her rapidly growing social media platform that's valued at more than $1 billion.
What’s the value of a little neighborly conversation? Investors believe it’s worth more than a billion dollars, especially if it’s generated by Nextdoor, a neighborhood social media platform that this month announced a fourth round of funding of $110 million and a valuation of $1.1 billion.
The fresh infusion of funds more than doubles Nextdoor’s investments since its launch and has been provided — in large part — by venture capital firms Redpoint Ventures and Insight Venture Partners. Nextdoor’s previous investors delivered about 35 percent of the new funding.
“That’s just a huge vote of confidence for what we’re doing and something that we’re particularly proud of,” said Nextdoor Co-founder Sarah Leary.
She highlighted the company’s propensity for growth as the main reason for the investment. The platform’s social network musters 5 million exchanged messages per day from more than 53,000 neighborhoods nationwide. Nextdoor is also used by nearly 700 jurisdictions for citizen communication through its government dashboard, Nextdoor for Public Agencies.
Leary said new funds are already invested in efforts to expand services. Central among these is its ability to accommodate new government agencies outside its public-sector user base to date, the majority of which are law enforcement and emergency responders. Other government partnerships have included sanitation, animal control and even citywide partnerships with municipalities like Philadelphia, which has embraced the platform in a number of departments. In the nation’s most populous cities, 85 percent of all neighborhoods use Nextdoor, according to the company.
“When you get to the point of 35 percent of the neighborhoods in the United States using your platform, you start to hit a penetration level where public agencies are banging on our door and asking ‘How do we get to be a part of this network?’ and ‘How can we use this platform to better communicate with residents?’” Leary said.
Nextdoor Polls is the latest feature coming to Nextdoor’s government platform. At present, polls are only available to residents who can publish questions on civic and neighborhood issues, collecting feedback anonymously. A feature to share poll results is on the way, but Leary said it will be up to neighborhoods and neighbors as to whether they share such information with cities.
“Polls was one of these features that residents had been asking for for the last year or two,” Leary said. “And now you have a platform where with a click of a button, you can ask a question of neighbors to get responses, and that’s incredibly powerful.”
Notwithstanding features and progress, investors are equally eager about the network’s promise to start monetizing the platform. Since 2010, when Nextdoor was first organized, the company has held off, focusing instead on community building. However, now with a vast user base, Leary and fellow co-founders have decided the wait is finally over. The process will begin this year, but Leary said the shift will not translate to costs for Nextdoor’s users or public agencies.
Monetization is likely to mean revenue through connecting residents with local businesses and service providers. According to Nextdoor, fee-based businesses and service providers might find better ways to entice local customers through its recommendations. For example, with on-demand services — like babysitting, dog walking and other grass-roots labor — Nextdoor could potentially monetize through commissions on transactions.
It was confirmed that 80 percent of endorsements on Nextdoor are about local products and services. Pairing these with sponsored recommendations could spell strong revenues as it’s done for social media giants like Twitter, Facebook, Yelp and others.
“It’s an exciting time for us,” Leary said.