Nextdoor, a social network that connects neighbors, said on Tuesday it would merge with a blank-check company backed by Khosla Ventures in a deal valued at $4.3 billion.
The deal with special purpose acquisition company (SPAC) Khosla Ventures Acquisition Co II (KVSB.O) includes a private investment of $270 million from Baron Capital Group, Dragoneer, accounts advised by T. Rowe Price Associates and Cathie Wood’s ARK Invest.
Nextdoor Chief Executive Officer Sarah Friar and existing investors Tiger Global and Hedosophia will also invest in the deal, which will generate proceeds of about $686 million for the combined company.
Founded in 2011, the San Francisco-based company allows members to use its mobile app and website to seek advice from their neighbors on anything from babysitters to organizing local sports clubs or dealing with rodent infestation.
A SPAC is a shell company that seeks to merge with a private company and in the process takes it public. SPAC mergers gained popularity last year, but are experiencing a slowdown due to weak investor appetite and greater regulatory scrutiny .
The merger, which comes against the backdrop of a lull in dealmaking due to weak investor appetite and greater regulatory scrutiny in the SPAC market, is expected to close in the fourth quarter this year.
Khosla Ventures Acquisition Co II raised $400 million in its IPO.
