My wife and I moved into our first home in September of 2012, and that was when we learned about Nextdoor from our HOA president. The company was founded in 2008 and launched in October 2011. You can’t just join Nextdoor like you would Facebook, you have to be invited by someone already a member of Nextdoor, and then Nextdoor would send out a physical postcard to your home address with a pass/join code to be able to join. They want to make sure we are who we say we are. I have to give them a lot of credit for this business decision since it is a huge and costly task. Fake profiles and safety concerns are still the big problems for many other social media companies such as Facebook/Meta ($FB), Twitter ($TWTI), etc . Soon after joining Nextdoor, I immediately told myself to invest in the company as soon as they IPO since I found that it is very simple to use and useful as well.
Why do I say Nextdoor is a nice guy? It is not because their stock ticker is KIND, but it is simply because they have been quietly expanding throughout the U.S. and 11 other countries so far without any major controversy like Twitter, Facebook, Google, and TiKTok just to name a few. They are also quietly adding ads on their platform without having any rejection from their users like myself since 2017. Now, almost 10 years later, Nextdoor is a public company under ticker ($KIND). It went in a merger deal with SPAC Khosla Ventures ($KVSB) for a combined value of $4.3B. Some people think the company is overvalued, and It is currently trading around $12-$14 range; however, I think the company can easily double the value in the next 12-18 months. Below are a few bullish reasons that will take it there (some are from their Q3 2021 financial results).
- Leadership team from well known tech companies
- Excellent CEO – Sarah Friar
- More than 30% U.S. households are on ND and growing
- Expanding to 11 Countries and growing
- Planning to enter Asia market
- Daily active users increased dramatically
- Over $670 millions new funding for expansion
- Revenue increased over 60% over last year
- Total Weekly Active Users increased 33 million
- Recession proof business model?
- Specific ads target directly to local consumers
Below are a lot of the advertisers working with Nextdoor in my local neighborhood, and If you pay attention then you will see around 50% of the first 10 new feeds on their platform are advertisements from many large companies to local businesses.
Nextdoor is not out seeking to compete with Facebook or anyone else for that matter. It’s growing beside other social media platforms just fine. I, myself like many others, do have many social media apps on our phones, and Nextdoor and Facebook apps are next to each other on my phone. Nextdoor is a long term play in my view with an extreme growth potential. First of all, I am willing to park my money in a company where its founders and early investors are willing to invest so much of their money and time to create a useful platform that serves millions of users without revenue in their early years. They had a long term business plan for growth without seeking to cash in quickly, unlike the recent trend that we are seeing with many tech and EV companies. Secondly, the company is led by a star CEO, Sarah Friar, who was the CFO at Square ($SQ). As I mentioned in my last article , you are not only investing in a company, but you are also investing in its CEO. Since Sarah joined Nextdoor in 2018, its revenue has more than doubled under her leadership!
As always, do your own due diligence before you make any investment decisions, and leave us your comment on where you see Nextdoor in the near future.