The 5 year old local social network connects users with the people that live around them, allowing conversations to open up about community events, needs, services, opportunities, and safety. The site basically becomes Facebook for your hometown, allowing you to connect with those who live down the street or across town.
“Building community is really, really hard,” Nirav Tolia, CEO of Nextdoor, said in an interview. “Trust is essential, and it has to be authentic.”
The company announced a funding round Wednesday where it raised $110 Million. The round was led by Redpoint Ventures and Insight Venture Partners and was based on a new valuation of $1.1 Billion, the New York Times confirms.
The company plans on taking the round to boost up their monetization efforts. Nextdoor is looking to expand its recommendations program. 5 million messages are exchanged daily on the social network and about 80% of those are conversations about local business and services. 1 million, Nextdoor claims, are users directly recommending businesses to other users.
Nextdoor will be using the funding round to ramp up its systems to mine these messages and convert them into sponsored posts to their user community. All this is based around a goal of helping users easily find the quality services they need, right near them.
The new funding is also allowing the company to experiment with alternative streams of funding. The Nextdoor development team is looking to create on-demand services for the site, similar to Uber and InstaCart. With this system in place, users will be able to book services from local businesses within the site. This will allow businesses to modernize without the upfront costs and drive new online sales. Netdoor plans to monetize by taking a cut of the service fee.
Investors are eyeing the potential here because Nextdoor is targeting a group of businesses and services which have yet to make the jump into online marketing. The social network mentions baby sitting and dog walking as some of the small businesses targeted.
“When people use Nextdoor, they’re not looking to post a cat pic, they’re looking for services, looking to sell things,” said Bill Gurley, a partner at venture capital firm Benchmark and invested in Nextdoor, stated in an interview with the New York Times. “From an advertising standpoint, context matters.”