NextDoor, the social network for neighborhoods, raises $18.6M

While Facebook (s fb), LinkedIn (s lnkd) and Twitter have helped us connect to social networks online, there’s still a big opportunity in helping people connect to the real-world social community — our local neighborhoods — right outside our doors. While our links to our neighbors are getting more and more tenuous, in most cases, people still see a lot of benefit in knowing who they live next to and connecting to this larger network.
That’s the opportunity that San Francisco startup NextDoor went after when it launched in nine months ago with its Facebook for neighborhoods idea. And now the startup is getting a big endorsement in the form of $18.6 million in new funding to pursue this market, which is turning out to be a promising. The new funding comes from existing investors Benchmark Capital and Shasta Ventures and new investors DAG Ventures, Greylock Partners, Allen & Company and Pinnacle Ventures.
NextDoor said it now has about 3,700 neighborhoods on board in 48 states with a median of 600 to 700 members in each network. The service is adding 22 neighborhoods every day now. My first worry about a program like this was that in the same way that many of us don’t invest in learning who our neighbors are, many NextDoor users wouldn’t be involved.
But Nirav Tolia, CEO and Co-founder of NextDoor told me that 40 percent of users have contributed to NextDoor through comments or posts and 33 percent invite a neighbor. He said the most popular category for NextDoor posts is getting and sharing recommendations (26 percent of users), followed by civic issues (22 percent), crime and safety (20 percent), classifieds (14 percent) and events (11 percent).
Tolia said NextDoor has managed to grow by emphasizing privacy so users must confirm their address to be accepted into their local NextDoor website, which is shielded from search engines and other NextDoor neighborhoods. Users can also hide their actual address, phone number and email address if they want to. That trust and privacy encourages people to share and open up to each other for recommendations, tips and more.
“It’s not about becoming friends with your neighbors, it’s about working with your neighbors on useful things like crime and safety,” said Tolia.
The new money will help the company add employees as it tries to serve more neighborhoods. Tolia said with 200,000 neighborhoods in the U.S., NextDoor has a huge opportunity to grow and become a real social tool in the lives of millions of people. NextDoor also needs to figure out its revenue plans. With 40 percent of the posts currently about recommendations and classified ads, Tolia believes NextDoor could easily make money by connecting local businesses with users. It could also partner with home security companies to help them acquire customers.
I think there’s definitely a place for new niche social networks like NextDoor. I personally don’t know my neighbors by name but I’d like to. I’m still a little skeptical about how much time I’d spend each day on NextDoor. But I think for many people, it’s easy to justify signing up, just to stay on top of local issues and get warnings about neighborhood problems. The key will be keeping the users involved on a regular basis. That’s a still a challenge online, just like it is in real life.