Nextdoor, the once-hot social network for neighborhoods, wants to claw its way back to the top and prove that people can use the platform for more than just finding lost cats.
The San Francisco company’s shares have plunged more than 80% since its market debut in 2021. Nextdoor shined brightly when people locked at home during the COVID-19 pandemic spent more time online, but in recent years, the platform has lost its luster.
For Nextdoor co-founder Nirav Tolia, who returned last year as the chief executive, the company’s turnaround plan comes with high stakes and a ton of emotion.
Tolia, a charismatic serial entrepreneur who uses a lot of metaphors, described Nextdoor as one of his own children. He stepped down as Nextdoor’s chief executive in 2018 but remained on the board before retaking the helm more than five years later.
“You don’t really get too many chances in life to truly have a second whack at things, a second bite at the apple,” said Tolia, a 53-year-old father of three.
Nextdoor, a place where neighbors post about missing pets, stolen packages and furniture sales, hasn’t changed drastically over the years. And that’s part of the problem, analysts say.
Other social networks such as Instagram, YouTube and TikTok have held people’s attention and gobbled up ad dollars through short-form videos. Meanwhile, people are increasingly turning to artificial-intelligence chatbots to find information and news.
Compared to entertaining content on other apps, Nextdoor posts can seem downright boring.
Nextdoor, once dubbed the “anti-Facebook” for its quaint local posts, also garnered a reputation as a “Twitter for old people,” where nosy neighbors constantly complain.
Now Nextdoor, a platform with more than 100 million users globally, is trying to entice people to use the app more frequently by featuring local news stories, providing timely alerts during emergencies and giving recommendations through an AI chatbot.
It’s promoting a redesigned Nextdoor and changing its stock symbol from KIND to NXDR, marking a new chapter for the beleaguered social network.
“The reason Nextdoor was not achieving its potential or on the right trajectory was because the product wasn’t good enough,” Tolia said.
Whether Nextdoor’s strategy will pay off remains to be seen. In Silicon Valley, where entrepreneurs fail fast, founders from Apple’s Steve Jobs to Twitter’s Jack Dorsey have returned to revive businesses they started. But success is not guaranteed and Nextdoor is up against rivals such as Facebook, where people also use groups to connect with neighbors and its Marketplace feature to buy and sell goods.
Some analysts expressed skepticism about Nextdoor’s turnaround plan. Morgan Stanley in May downgraded the company’s stock rating, noting that the company faces stiff competition during a time of economic uncertainty.
“While national advertisers are increasingly interested in connecting with consumers at the local level, [Nextdoor] trails peers in terms of ad innovation and measurement/performance capabilities,” wrote Brian Nowak, an equity analyst at Morgan Stanley.
Nextdoor’s revenue growth has slowed and the company is losing money.
In the first quarter, the company’s revenue was $54 million, up 2% compared with the same period last year. Its net loss totaled $22 million, but the company has a strong cash position of $418 million.
Still, the company has carved out a hyperlocal niche among other social networks, other analysts said.
B. Riley Securities started coverage of Nextdoor last month and gave the stock a “neutral” rating. Naved Khan, managing director of equity research at B. Riley, said he wants proof the turnaround plan will drive better results.
“What they’ve realized is there can only be like so many lost cats or things like that in their local neighborhood,” he said. “They need to give people more reasons to visit, not just ‘Hey I found a suspicious person lurking around.’”
Nextdoor’s rise and fall
Nextdoor first launched a private social network in the U.S. for neighborhoods in 2011, distinguishing itself from Facebook, where people connect to friends and family.
Nextdoor’s start stemmed from the failure of another company that Tolia helped start: Fanbase, a sort of Wikipedia for sports. When Fanbase flopped, the co-founders pivoted to a new idea.
To rope in its first users, people who registered their neighborhood on the platform had to get 10 people to verify that they lived there. Nextdoor would confirm that people resided in the community by mailing postcards with invitation codes. Lorelei Manor in Menlo Park, Calif., was Nextdoor’s first neighborhood.
As Nextdoor got more funding, pressure to expand its business grew. Tolia said he was asked to leave. Sarah Friar, the chief financial officer at payments company Square at the time, took over as Nextdoor’s chief executive in 2018 before it made its public debut.
While Nextdoor’s usage surged during the pandemic when people were locked inside, it later struggled to grow its ad revenue. In 2021, the social network’s annual revenue grew 56% compared to 2020. But its revenue growth in 2023 dropped to 3% and its net loss widened.
The company laid off 25% of its full-time staff in 2023. It had 546 employees as of December 2024. Friar, who is now the CFO at OpenAI, left Nextdoor last year, leaving the door open for Tolia’s return.
Nextdoor went public through a merger with a blank-check company backed by Khosla Ventures. The once high-growth startup appealed to investors because of its focus on hyperlocal content, but as growth slowed and it lost money, investor confidence in the company waned.
The social network emphasized the importance of kindness, but the company also faced heightened concerns about racial profiling after protests erupted in 2020 over the police killing of George Floyd in Minnesota.
Like other social networks, Nextdoor also got its fair share of complaints. Users complained about content moderation on the site. Others reported that they saw too much content from outside their neighborhood, making their feeds feel less local.
Some Nextdoor users lamented the app is filled with “Karens” grumbling about everything from when people mow their lawns to dog poop on the sidewalks.
Nextdoor has proven useful for people looking to find work.
Santa Monica resident Katie O’Neill, 55, joined Nextdoor roughly 10 years ago. Her first post was about searching for a worker to regrout her kitchen tiles.
During the pandemic, when schools closed down, the teacher and single mom turned to Nextdoor to post her paintings of the Pacific Palisades.
“Suddenly I was making as much money selling my artwork as I did teaching,” she said. “It really saved my behind.”
When O’Neill lost her art studio and apartment in January during the Pacific Palisades wildfire, she turned to Nextdoor to share the devastating news with her neighbors.
The audience on Nextdoor skews older than other social networks that teens frequent. Roughly 29% of Nextdoor’s U.S. app users in the first half of this year are between the ages of 35 to 44, and its second-largest demographic is people over 55, according to data from market intelligence firm Sensor Tower.
Nextdoor’s low stock price and the amount of cash the company has on hand has enticed some users to invest in the social network. One of those people is Wisconsin resident Matt Zeller, who ironically isn’t very active on Nextdoor but likes the idea of using it more to read local news.
The 37-year-old, describing himself as an “elder millennial,” said he’s at the stage of his life where he craves community connection in a polarized world.
“I’m hoping and betting that there will be a little money to be made in the notion of getting people back into the community,” he said.
The turnaround plan
Nextdoor’s turnaround plan focuses on giving users hyperlocal updates, delivering information that helps people solve problems and providing timely notifications. It is featuring local news, working with more than 3,500 local publications across the U.S., U.K. and Canada. News partners include the San Francisco Standard, the London Standard and the Toronto Star.
A green dot on the app will turn yellow or red when there are more urgent emergencies, such as a fire or a burglary in progress, to watch out for in users’ neighborhoods. And the company is testing an AI chatbot that summarizes what neighbors recommend for hikes, gyms, restaurants, gardeners and other favorites.
Running a company is already stressful but a turnaround adds weight to Nextdoor’s uphill battle.
When Tolia stepped down as Nextdoor’s chief executive, he was burned out, lost sight of what drove him and wasn’t sure if he wanted to be a chief executive ever again. Then he became an investor, temporarily moved to Italy and appeared on the reality TV show “Shark Tank.” He now lives in Dallas with his wife and kids and makes trips to San Francisco, where Nextdoor is headquartered.
The son of immigrant physicians from India, he grew up in a small town in Texas.
Mellowing out as he got older, Tolia learned to better manage stress.
“I have very high standards for myself, for the company, for everyone around,” he said. “But when those standards aren’t met, I want to be kinder to myself.”
Tolia, an early employee of Yahoo, also helped start the review site Epinions in 1999.
Asked if Nextdoor plans to sell the company if the turnaround plan works, Tolia said the company is trying to build the foundation for a company that lasts. Plus, he added, companies are bought, not sold.
“If someone wants to buy you because you’re generating a bunch of value, well, then I mean, maybe Zuck will pay something that will just kind of blow away the conception of, you know, what you think is reasonable, right?” he said, referencing Meta Chief Executive Mark Zuckerberg.
For Nextdoor, the climb is far from over.
“I love the pursuit of summiting mountains,” Tolia said. “When you get to the summit, you look off on the horizon and there’s another mountain and you go to the next one.”
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