Nextdoor, the micro social media app, allows you to connect with your neighbors through “groups” you join based on location. Now the app has connected with the public through its 2021 initial public offering (IPO) and continued growth in 2022. Technology companies are usually the belle of the ball, but when private companies go public, some market participants are a little more than skeptical.
When Did Nextdoor IPO?
Nextdoor IPO’d on November 8, 2021, raising over $4 billion in capital.
Nextdoor Financial History
Nextdoor has undergone multiple rounds of funding, and the company hasn’t yet filed the full set of financial disclosures required before its IPO. This means that it can be a bit more challenging to dissect Nextdoor’s financial history and growth.
In 2017, the company raised $75 million in a Series G round. This put Nextdoor’s total valuation at about $1.5 billion.
Nextdoor’s local community services and polling functions are used across the country — and the company has only grown since 2015.
In May 2019, the company raised another $123 million to bring the total valuation of the app to more than $2.1 billion. Nextdoor has continued to grow through 2019 and 2020, with executives estimating an IPO valuation of $4 to $5 billion.
Nextdoor Potential
Nextdoor is a hyper-local social media application that allows neighbors to connect with each other based on location. When signing up for Nextdoor, users must submit their real name and address, and the app then assigns them to a neighborhood.
Demand for the social media app has skyrocketed throughout 2020, and it’s now available to users in 11 countries. One out of every 4 communities in the United States is currently accessible through Nextdoor, and local advertising plays a key role in the company’s revenue.
Despite the fact that Nextdoor has seen a month-over-month growth in its user base of more than 80%, the onset of the current COVID-19 pandemic hasn’t all been good news for the social media application. The geographic segmentation feature of the app has drawn criticism from users, claiming that this enables users to racially profile other members of the community based on location.
Though this has been a point of contention for years, the problem has become particularly glaring in light of recent anti-racism protests and marches occurring across the country. Moving forward, Nextdoor will need to balance its explosive growth with control to ensure a positive experience for every user.
How to Buy Nextdoor Stock
If you already know how to buy stocks, you can proceed.
Never bought or sold a share of stock before? No worries — our beginner’s guide will help you decide between the best brokers and place your 1st buy order.
- Pick a brokerage.
A stockbroker (commonly referred to just as a “broker”) is a financial service provider that is authorized to buy and sell stocks on behalf of retail investors. Most brokers offer a unique trading platform that you can use to instantly place buy and sell orders.
If you already have a brokerage account, you will be able to use it when Nextdoor comes to market so long as you meet your broker’s minimum account requirements and you have access to U.S.-based markets.
If you don’t already have a brokerage account, you might want to consider the following qualities when you decide where you’d like to trade:
• Account minimums: Some brokers allow traders to open an account with just a few dollars, while others require account holders to maintain up to $1,000 in their accounts. If you only have a few dollars to invest, choose a broker that has a $0 account minimum.
• Commissions and fees: Many brokers have switched to a $0 commission schedule — but not all brokers offer free trading. Be sure to check each broker’s fees and commissions before you decide where to open an account, as these charges can quickly compound if you’re a frequent trader.
• Types of accounts available: From Roth IRAs to taxable brokerage accounts, there are many types of accounts that you can use to invest in the stock market. You may want to familiarize yourself with the multiple types of accounts you can use to trade and their respective tax advantages before you open a brokerage account. Not every broker offers access to all types of trading accounts.
• Trading platform: Some brokers cater to a novice trading audience, while others offer a wider set of tools and order types to appeal to investors who have more experience on the market. You may want to choose a broker that offers a demo platform you can practice with before you decide which option has the best platform for your skill level.
• Access to additional markets: Every US-based broker will allow you to freely trade on the New York Stock Exchange and the Nasdaq. However, if you’d like access to additional markets (for example, the forex or cryptocurrency markets) be sure that you select a broker that supports these assets as well. - Decide how many shares you want.
Next decide how many shares of Nextdoor’s stock you want to purchase. Nextdoor hasn’t yet announced the type of IPO it will pursue, nor the opening price of their stock should they pursue a traditional IPO listing. This can make it a bit more challenging to decide how many shares you want to buy before the listing comes to market.
Instead of thinking in terms of the number of shares, it’s better to set a dollar limit for the day of your investment. Don’t worry if your dollar limit doesn’t even out to a perfect, rounded number of shares — most brokers now support “fractional shares” that allow you to invest with as little as a single dollar. - Choose your order type.
After your account has been opened and the date of Nextdoor’s IPO has arrived, you can place your buy order to invest. There are multiple types of buy orders, and the type of order you select will determine when your order is executed and how much you’ll pay per share of stock you buy.
Here are a few of the most common order types your broker might offer access to:
• Market orders: Market orders are executed at the current market rate. For example, if Nextdoor’s stock is trading for $50 per share and you place a market order to buy shares, you’ll likely pay around $50 per share. Market prices can change quickly, but market orders are also filled faster when compared to other order types.
• Limit orders: Limit orders are executed only at a price that you specify. For example, if you place a limit order to buy shares of Nextdoor with a limit price of $50 per share, your broker will only execute the order if it’s possible to buy each share at a price of $50 or less.
Your broker may also offer advanced order types that give you more control over when your order is executed. - Execute your trade.
After you’ve filled out your order, you’ll submit it to your broker to execute. Before you submit your order, double-check that you’ve chosen the correct order type, the correct number of shares and the right price if relevant.
Once you submit your order, you can sit back and relax — your broker will take care of surveying market conditions and completing your order. From here, 1 of 2 things can happen:
• Your broker fills your order: If your broker is able to fill your order according to your specifications, you’ll see your shares in your brokerage account. Most brokers also send out an email or text notification informing you when your order is complete.
• Your order goes unfilled: Orders may be unfilled for a number of reasons, but the most common is that the price parameters you’ve indicated in your order weren’t reached. Depending on your broker, you may be able to leave your order open for up to 90 days and your broker will fill it as soon as possible.
The amount of time it takes to fill your order will vary depending on current market conditions and any price limits you’ve set in place.
Best Online Brokers
Not sure where to start searching for a brokerage account? Check out our top broker picks below.
- Best For:Active and Global TradersVIEW PROS & CONS:Securely through Interactive Brokers’ website
- Best For:Global Broker for Short SellingVIEW PROS & CONS:securely through TradeZero's website
Prepare to Invest in Nextdoor
As is the case with any other stock, you should do as much independent research on Nextdoor and its corporate structure before you invest. Though our guide is a fantastic place to begin your investing journey, you’ll also want to keep a reliable source of news on-hand so that you can evaluate this investment for yourself.
About Joshua Enomoto
His distinct writing style of distilling convoluted data into relatable and compelling narratives has earned him recognition among several investment-related publications.