Recently, the IPO (Initial Public Offering) market has become interesting to a large number of completely new investors who have not even been participants in the stock market. There is one big reason — profitability. The average return after the lock-up period is 40.5%, which corresponds to 162% annual in dollars (excluding commissions and personal income tax). In this article we will discuss the key details of Nextdoor IPO: the history of the company, when is the Nextdoor IPO date, Nextdoor IPO price and everything you should know to make a decision whether to invest in it or not.
Nextdoor History
Nextdoor was founded in 2008 by Nirav Tolia, Sarah Leary, Prakash Janakiraman and David Wiesen in San Francisco, CA. The idea is very simple. Communities are always more resourceful than an individual, why not help neighborhoods come closer? To let people communicate more, help each other out and find everything within an arm’s reach. One just needs to enter their real name and address. Once this is done, the platform assigns users to a neighborhood group based on their address.
Benchmark Capital, Shasta Ventures, and Rich Barton were among the early investors in the startup. The next outstanding investment round happened in 2012, when Nextdoor raised US$18.6 million in venture capital funding. And in 2014 the company had from 80 to 100 employees. Not much is revealed from the early investment deals, but it’s a fact that by December 2017 Nextdoor had raised $285 million in financing. And $4.3 billion during the Nextdoor stock IPO.
The company has been growing steadily since the beginning because it relied on the network effect. Lockdowns brought acceleration, because people sought support and a safe space to discuss the current situation.
Now it’s not just an app for neighbors, it serves the interests of 3 groups. Neighbors get to read local news, talk to each other, sell stuff and even find dates in the neighborhood. Businesses can connect to the platform to promote local goods and services, get reviews and also analyze data about customers in a specific area. The third group is public agencies, which also get access to instant distribution of information and analytics on people.
The data part caused controversy among the app users because some people claimed that privacy and safety measures were damaged, some were concerned about racial differentiation. In 2015 media revealed that Nextdoor users have been racially profiling people of color in neighborhoods across the United States.
Different accusations slowed down the Nextdoor IPO process. But thanks to the pandemic it was time to ask: “When is Nextdoor going public?” And the Fortune magazine called it ‘KIND of a big deal’.
Let’s discuss the final Nextdoor IPO 2021, but, firstly, Nextdoor IPO date and price details...
Nextdoor’s Public Listing Key Data and IPO Date
IPO Date: November 8, 2021
Ticker: KIND
Exchange: NYSE
Stock price: $11.12
Valuation at IPO: $4.3 billion
CEO: Sarah Friar
Category: EDP Stocks
Method: via SPAC
Shares on the Nextdoor stock IPO date skyrocketed 40% in the first hour, so that trading with this stock had to be temporarily halted. It’s a usual deal when the market sees very high volatility and volumes. Then investors became less optimistic and the price fell to $13.01 at the market close. Nonetheless, it’s 17% from the opening price and a great yield for IPO traders in just one day.
The company preferred a Special Purpose Acquisition Company (SPAC) merger to the traditional IPO process. This time Khosla Ventures Acquisition was a black-check company to help Nextdoor go public.
As of December 3, the Nextdoor stock is traded at $10.12 and suffers the same pattern as many other companies going public. It always jumps the first day, goes sideways in the next couple of days and when all demand is over, the stock falls to the initial price. We discussed this in the article as well as the strategy for further steps. But let’s have a look at the prospects of Nextdoor’s business.
So What About Investing Now?
Nextdoor brings in revenue just like other social media: through ads and sponsored content. The company says it made $123 million in sales in 2020 and is projected a 47 percent year-over-year growth this year, followed by 40 percent in 2022.
The challenge now is to keep their customer growth after the pandemic and to do so the company has recently introduced interactive maps to find services and other forms of help, and a “kindness reminder” to help the moderating team stop posts with intolerant, irrelevant and rude content. The money raised from the company’s expected IPO will help to support the development and growth of these extra features, which should help in their effort to retain users.
Another way is to expand geographically. The company’s presence in the States is already substantial: according to their internal statistics 1 in 3 households in the states uses Nextdoor. Moreover, Nextdoor is present in 11 countries including Canada and Australia.
"Naturally speaking as we go to new countries we see much faster growth because we're younger, and more people are finding the platform," said CEO Sarah Friar.
Nevertheless, the company is still in the red and is expected to lose $101 million in 2021. That could be the reason behind the stock fall.
FAQ
Is Nextdoor a public company?
Is Nextdoor publicly traded? Yes, you can buy shares of the company. Nextdoor had an IPO on the NYSE on November 8, 2021 under the ticker KIND. It went public via merger with special purpose acquisition company (SPAC) Khosla Ventures Acquisition.
How much is Nextdoor worth?
Nextdoor had a merger with Khosla Ventures Acquisition at the valuation of $4.3 billion. As of December 3, 2021 the market cap is $3.88 billion due to the stock’s decline.
What is Nextdoor’s business model?
The app is free, so the company earns from ads and sponsored content placed in the app. Last year it made $123 million in sales in 2020 and is projected 47 percent year-over-year growth this year, followed by 40 percent in 2022.
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