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Nextdoor, the social network for neighbors, raises $18.6 million to help Americans stop bowling alone

Nextdoor, the social network for neighbors, raises $18.6 million to help Americans stop bowling alone


Nextdoor, a private social network for neighbors, has raised $18.6 million to accelerate its growth across the United States.

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bowling alone
bowling alone

In his seminal 1995 essay, Bowling Alone, academic Robert Putnam examined the frayed social fabric of America's cities and towns. He pointed out that while more people than ever were hitting the lanes, fewer and fewer were joining together in leagues. More than a decade later, with so many people hyper-connected across multiple social networks online, not much has changed. "This is a nation where, according to recent data from a Pew Research center, 29 percent of Americans knew just a handful of their neighbors," said Nextdoor founder Nirav Tolia. "And 28 percent don't know a single one by name."

Today Nextdoor, a private social network for neighbors, announced that it raised an $18.6 million round of venture capital funding from blue chip backers like Benchmark Capital and Greylock Partners. Over the last year the company has been operating in a closed beta, growing to 3,500 neighborhoods across 48 states. "We've proved that there is a real demand for this service," Tolia told me. "With these new funds, we'll be able to scale it across the nation."

There are a lot of things about Nextdoor that stand out from your typical internet company. You can't sign up with your Facebook account, you won't find any of its content indexed on Google search, and when you create a new account, you need to wait for a postcard from Nextdoor to arrive in the mail before signing in for the first time. "In a lot of ways, this is the opposite of what most startups try to do on the web," Tolia says. "But that's because we are going after a portion of the social graph that is very different from your friends and family."

Nobody is working to connect people with the folks who live around them they don't already know

Users sign up for neighborhoods on Nextdoor by literally selecting their home off a map. They can then confirm their identity by waiting for a postcard to arrive by mail or, submitting their phone number for a reverse directory lookup or, if they have a credit card linked to that address, paying a nominal 1 cent fee from their bank account. "That kind of friction in the sign up process is something most startups are desperate to avoid," says Tolia. "That's smart, unless the pain is worth the gain."

Each neighborhood on Nextdoor is a private, password protected site encrypted with HTTPS. Once logged in, users can find a wealth of information that wouldn't appear on most social networks. Tolia took me on a tour of a Memphis, Tennessee neighborhood where more than half of the 1,200 homes had registered. Along with the typical info found on social networks, Nextdoor users shared personal details like the names of their children, when they will be on vacation and even their home phone numbers. "Because of the level of privacy and security we create, people are willing to share a lot more," says Tolia.

User can message one another, create listing for local events, or post to the area newsfeed. "It's incredible what neighbors accomplish when they come together," says Tolia. A community in Oakland, he claims, recently helped police apprehend a gang of burglars by sharing information through Nextdoor. Browsing the Memphis site, we noticed someone who posted about lost keys, and several neighbors pointed them to another member who had recently found a pair nearby. "This is not like AirTime, where you are supposed to chat with random strangers from around the globe," says Tolia. "You're strengthening the community, these real world relationships based on location that may be going to waste."

Along with posting on crime and community events, lots of commerce takes place on Nextdoor. People find babysitters, offer guitar lessons and sell unwanted furniture. "The service is going to remain free for users," said Tolia. "We see a lot of opportunities to create a business around all the activity already happening naturally among our users."

According to Pew Research, most online activity among neighbors now takes places on email lists, local forums and area blogs. Nextdoor hopes to win those communities over by offering a more private, secure space with a richer set of social networking tools. Whether most people will want to invest the time to create yet another online profile remains to be seen. And Nextdoor will no doubt have to contend with occasional crises among users who abuse each other's personal data. The site also seems like a rich target for hackers, who will surely find ways to snag careless users' passwords.

Tolia is a veteran of the dot-com boom, a co-founder and CEO of Epinions, also backed by BenchMark Capital, which was launched in 1999. The company managed to navigate the subsequent bursting of the internet bubble, merging with DealTime to become, going public in 2004 and eventually selling to eBay in 2005 for $620 million. The success was not without controversy. Google reportedly backed out of deal to purchase after discovering the Tolia lied on his resume and several of Tolia's co-founders at Epinions sued him, claiming they were tricked into selling their shares.

But BenchMark welcomed Tolia back as an entrepreneur in residence, and provided the seed funding that allowed Nextdoor to run its private beta over the last year. That firm, alongside Greylock Partners, is searching for the remaining, undeveloped pockets of the social graph. "Facebook is your friends and family, Twitter is the people that interest you, LinkedIn is your professional world," says Tolia. "But there is nobody who is working to connect people with the folks who live around them that they would not otherwise know."