(Corrects total sum raised to $21.6 million instead of $21.3
million in headline and first sentence)
* Facebook backer David Sze will invest largest single sum
* Appetite for social networks endures in wake of Facebook
* Amazon's CEO Jeff Bezos is investing
By Sarah McBride
SAN FRANCISCO, Feb 12 Neighborhood social
network start-up Nextdoor has raised another $21.6 million, even
as many investors shy away from the sector in the wake of
troubled Facebook initial public offering last year.
The new funding includes $15 million from Greylock Partners,
whose partner David Sze will be joining Nextdoor's board. Sze,
known for his involvement in networks LinkedIn and Facebook in
their earliest days, said he has never before invested so much
in a single investment round.
The investment showed many investors still have plenty of
cash for social networks, provided they are tapping a niche
where users get deeply involved and where a path to
profitability is emerging.
"That is the next phase," Sze told Reuters, talking about a
generation of more specialized networks that have come after
early networks like Facebook built broader networks that
introduced consumers to the concept. "There's less huge
opportunities, but there's more point opportunities."
Nextdoor, which launched in late 2011, is now in 8,075
neighborhoods around the United States, with plans to expand
overseas. It links communities of neighbors in private networks.
"It's people who have roots," said chief executive Nirav
Tolia about his members in any given neighborhood. "They either
own property, have families, or are on their way to owning
property or having families."
Members post Facebook style, giving or seeking
recommendations for services such as babysitters and yard
maintenance or local retailers and restaurants. They also post
about community issues such as parking; crime and safety; or
items for sale or loan.
The funding comes as other versions of social networks
--including private social network Path, question and answer
service Quora, and influence-measuring service Klout -- haven't
been able to gain serious traction among users, despite raising
tens of millions of dollars.
But Nextdoor is different, Sze says, because of the trust it
has built among its users, the rapid pace at which it is
growing, and the potential to make money down the line, even if
the exact mechanism remains nebulous.
"If you squint and think about it, you can draw the line to
where monetization is possible," Sze, who will join Nextdoor's
board, said. "Whether that is advertising or coupons or review
lifting, who knows."
Tolia believes the service will become "the next generation
of yellow pages," tapping into what he said was a $100 billion
local advertising market.
New investors Google Ventures and Bezos Expeditions, Amazon
chief Jeff Bezos' venture fund, participated in
Nextdoor's latest funding round. So did existing investors
Benchmark Capital and Shasta Ventures.
Nextdoor has raised a total of $40.2 million.
(Editing by Richard Pullin)