Nextdoor raises $60 million at an uptown valuationOctober 29, 2013: 9:01 AM ET
Neighborhood social network maker now worth around $600 million.
FORTUNE -- Nextdoor, a private social network for neighborhoods, this morning announced that it has raised $60 million in new VC funding, co-led by Tiger Global Management and Kleiner Perkins Caufield & Byers. The round was competitive, with sources telling Fortune that it values the San Francisco-based company at approximately $600 million.
Comcast Ventures also participated, alongside existing shareholders Benchmark, Greylock Partners and Shasta Ventures. Prior backer Google Ventures did not participate -- passing up a small 'pro rata' after failing to secure a larger allocation (several insiders attempted to lead the new round, but it's unclear if GV was one of them).
All of the new capital is considered "primary," meaning that none of it is being used to cash out company founders or early investors.
The new round comes just eight months after Nextdoor raised $21 million, and CEO Nirav Tolia says that he hadn't planned to contact investors until early next year. "We had $30 million on the balance sheet and only were burning a million and a quarter million per month, so this wasn't a need-driven round," he explains. "But we had a fairly unprecedented level of incoming demand starting in the summer, and decided to take advantage of the opportunity to grow our balance sheet and bring in some great partners. Lee Fixel of Tiger is unbelievable when it comes to international expansion, and I can't think of anyone who's been a better company builder than [Kleiner Perkins partner] John Doerr, who was involved with Netscape and Amazon (AMZN) and Google (GOOG)."
Neither Doerr nor Fixel will join the Nextdoor board, although Doerr will serve as a special advisor. Both of them echo Tolia's belief that Nextdoor could be the fourth major social network, after Facebook (FB), LinkedIn (LNKD) and Twitter (TWTR).
"We were investors in both Facebook and LinkedIn, and I think there are a lot of similarities to the early days, particularly of LinkedIn," says Fixel, who never before has agreed to be interviewed about a Tiger investment. "They have an opportunity to do for local and neighborhood social life what LinkedIn did for professional life."
Doerr adds: "I've talked a lot about SoLoMo, which stands for social/mobile/local. Nextdoor is all three."
The product is designed for neighbors to interact on a variety of topics, from social events to the best local repairman. It also has partnered with certain municipal governments, including New York City, which have the ability to push public safety information into the private networks.
Each neighborhood gets created by the first member who lives within a particular neighborhood, which the company defines as a geographic area with approximately 750 households (it ranges a bit, depending on rural vs. urban). So far, Nextdoor believes it has networks for one out of every seven American neighborhoods, and says that its reach has increased 400% over the past year.
Tolia says that the company originally had assumed that the user base would skew older, given that homeowners with school-age children may be most interested in local events, but he says that the demographics have been far more diverse. "The content type and use cases are partially driven by demographics, but no demograpghic is excluded. Certain neighborhoods in Florida are dominated by senior citizens, so the conversation is about things like healthcare. In San Francisco's Marina District, it's more about parties and dating. Even if someone doesn't plan to live in a neighborhood for their entire lives, that doesn't mean they aren't interested while they live there... And most of our 'deleted' accounts are actually just people who have moved to a new neighborhood and signed up for that network."
Nextdoor is not yet generating revenue, instead choosing to focus on scale in its early days (as did Twitter and, to a lesser extent, Facebook). But it expects there to be plenty of opportunities, including local advertising and national pushes from such merchants as home security companies. It also expects to expand internationally, with Canada to be its first non-U.S. market.
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