As Facebook hesitates in local, Nextdoor is building a huge neighborhood based social network. Yesterday the company announced a $110 million funding round (on top of more than $70 million in previous funding).
Nextdoor’s valuation is now more than $1 billion. On its blog yesterday the company exposed some of its growth metrics:
Today we are excited to announce a significant milestone: over 53,000 neighborhoods, representing more than 35% of the neighborhoods across the country, now rely on Nextdoor.
Nextdoor also said it sees 5 million daily messages on its network. The company estimated that roughly 80% of these messages concern “discussions about local service providers and businesses.” The commercial implications are obvious.
In 2013, Nextdoor had a presence in roughly 24,000 US neighborhoods. CEO Nirav Tolia told me at the time that the company’s most active neighborhoods were generating more than 100 messages per day. Now the aggregate volume of messages is dramatically higher.
The reach of Nextdoor has doubled in less than two years. Here are the range of ad-based revenue models the company could pursue:
- Display advertising
- Paid search advertising
There are other possibilities. Among them, Nextdoor could build (or buy) a local directory and create a marketplace where local services providers and consumers interact and book (or even pay for) appointments.
I suspect that scenario is an outlier on the whiteboard. But given the firm’s momentum and local-critical mass there are a wide range of revenue opportunities and possibilities. As another example: think of Facebook’s data and ad-targeting capabilities. At least some of those are undoubtedly shared by Nextdoor.
There are skeptics who say, notwithstanding the 80% statistic above, that it will be tough for Nextdoor to directly monetize its audience and traffic with local advertising. I’m not as skeptical and think the site could offer a range of interesting services and capabilities to both consumers and business owners.
Nextdoor CEO Tolia, one of the founders Epinions, has consistently said he is taking the long-term view and has lots of patience to let the site and the business model develop. Now, he’s also got the money.