Nextdoor, which is a service similar to Facebook (FB) but focused on neighborhoods, has snagged $60 million in venture capital at a valuation of over $500 million. Investors include Kleiner Perkins Caufield & Byers (KPCB) and Tiger Global Management.
The hope is that Nextdoor can crack the massive local e-commerce space.
Back in 2010, Nirav Tolia, Sarah Leary and Prakash Janakiraman launched the company. They all came with strong backgrounds at big-time Internet companies like Yahoo (YHOO), Microsoft (MSFT) and Google (GOOG) … and the experience certainly paid off.
As of now, the Nextdoor platform has about 22,500 neighborhoods — a number that has increased five-fold over the last year.
The Nextdoor service holds potential, too. With it, you can notify your neighbors about break-ins; organize a neighborhood watch group; find a babysitter; publicize events; or put up an award for a lost pet. It’s all part of a mission to “bring back a sense of community to the neighborhood, one of the most important communities in each of our lives.”
To promote privacy, Nextdoor also requires every member to provide an address verification and to log-in with a real name. The site also uses encrypted security and promises it will not sell user information to advertisers.
So what’s the business model? Well, over time, Nextdoor could turn into a powerful system to provide referrals for local service providers. In other words, the service could be potential competition for players like Angie’s List (ANGI) and Yelp (YELP).
But with a $60 million in fresh capital, Nextdoor does not have to rush to get revenues and can instead continue to focus on the user experience.
And so far, it seems the company is making the right moves to make it an important player in the local marketplace.
Tom Taulli runs the InvestorPlace blog IPO Playbook. He is also the author of High-Profit IPO Strategies, All About Commodities and All About Short Selling. Follow him on Twitter at @ttaulli. As of this writing, he did not hold a position in any of the aforementioned securities.