San Francisco-based Nextdoor is set to merge with Khosla Ventures Acquisition Co. II (KVSB), a special purpose acquisition company (SPAC) that is listed on the Nasdaq. When the deal closes, the combined company will be listed under the ticker symbol “KIND,” the companies said in a Tuesday (July 6) press release.
The deal values the social media network Nextdoor at $4.3 billion. The deal would also generate about $686 million in gross proceeds for Nextdoor. About $270 million of that would come from a private placement from funds and accounts advised by T. Rowe Price Associates, Baron Capital Group, Dragoneer and other investment firms, the release said.
The merger is expected to be finalized in the fourth quarter.
Nextdoor is a social media network that connects users to people living nearby and to information about their neighborhoods. The company it is active in more than 275,000 neighborhoods in 11 countries. In the U.S., close to one in three households uses the app, Nextdoor said.
One way Nextdoor makes money is by selling advertising to small businesses.
According to Nasdaq.com, the Khosla SPAC announced plans to go public with an initial public offering (IPO) in February. The goal was to raise up to $400 million to target a privately held technology company. It was the second SPAC, or blank check company, formed by Khosla Ventures.
Today’s press release said the deal would help Nextdoor expand — by hiring more employees, investing in ways that would generate additional revenue and further developing its products.
“We have long focused on partnering with cutting-edge, category-defining companies with tremendous growth potential, strong management teams and, importantly, clearly defined missions. said Vinod Khosla, founder of the SPAC and managing director of Khosla Ventures.
“Nextdoor has been at the forefront of cultivating ‘hyperlocal’ communities and neighborhoods since its inception, allowing neighbors to create meaningful connections — both online and offline,” said Nextdoor CEO Sarah Friar.
The pandemic actually strengthened Nextdoor by helping it flesh out a purpose, as consumers turned to the platform for connections.