Neighborhood-focused social network Nextdoor said it planned to go public via a SPAC, seeking to raise $686 million at a valuation of about $4.3 billion.
The company will go public by merging with a special-purpose-acquisition company, Khosla Ventures Acquisition Co. II KVSB, instead of going the traditional initial public offering route.
Nextdoor's SPAC is being backed by an affiliate of Silicon Valley investment firm Khosla Ventures. Participating are T. Rowe Price Associates (TROW) - Get T. Rowe Price Group Report, Baron Capital Group, Dragoneer Investment Group and others, along with the current investment group, which includes Tiger Global.
At last check KVSB shares were trading up 4.2% at $10.33.
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Nextdoor is a neighborhood-based social network. It says in a statement that in the U.S. nearly 1 in 3 households use the site "to access trusted information, give and get help, and build real-world connections with those nearby — neighbors, businesses, and public services."
The deal has a $270 million public investment in private equity from T. Rowe Price, Baron Capital, Dragoneer and Soroban Capital.
Alongside the SPAC deal, Nextdoor is founding the Nextdoor Kind Foundation, a nonprofit that will invest in neighborhoods to help them thrive.
Nextdoor Chief Executive Sarah Friar told The New York Times that the SPAC route made the most sense for the company by allowing it to be more closely involved with and counseled by a smaller and more targeted group of investors.
The SPAC also gives Nextdoor a better sense of certainty about how much money it would raise.
"We've been prepping for this now for a couple of years. We are ready, and we'll do this right," Friar said, according to the Times.