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Nextdoor: Putting Neighborhoods on the Digital Map

Entrepreneur Nirav Tolia wants to leverage the power of technology to build happier, safer neighborhoods with his latest startup Nextdoor.

"Using Nextdoor, neighbors create free and private websites where they can easily connect and communicate about the things that matter," he said.

Since founding the company in 2010, Nextdoor has over 9,000 neighborhoods on their site. Users can join for free, create their online "neighborhood" and invite others to join too.

NextDoor
Source: nextdoor.com
NextDoor

The online communities are kept private and are not accessible by search engines or third parties. Therefore, neighbors can exchange information about anything that's going on in the neighborhood, from burglary alerts to lost dogs and local events.

So far, Tolia and his team have not focused on revenue or monetization, but Tolia said when that day comes, Nextdoor will not inundate users with banner ads, pop-ups or messages from advertisers because that will hurt the value of the website. Instead, Tolia said Nextdoor will work with local businesses to provide special offers to members. "We've received hundreds of business development inquiries who want to use Nextdoor as a great advertising vehicle."

(Read More: Q&A with Nextdoor CEO Nirav Tolia)

Venture capitalist Paul Lee, a partner with LightBank, thinks the idea sounds interesting, but anticipates there will be some hurdles. "In terms of local advertising, from our experience with Groupon, it's harder than it looks."

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Groupon struggled to keep up with its huge growth, losing more than 70 percent in market value after its IPO in 2011.

Besides potential revenue challenges, Nextdoor has some big competitors that are also looking to build social platforms for local communities like Yahoo! Groups,Google Circles and even Facebook. However, Tolia said Nextdoor's focus on privacy distinguishes it from the competition.

"It's not a general purpose platform for friends and family like Facebook. It's not a general purpose platform mailing list like Yahoo! Groups. It's built from the ground up for your neighborhood, and as a result it is the best place for you to connect with your neighbors online."

Nextdoor has raised more than $40 million in funding from key investors Benchmark Capital, Greylock Partners, Shasta Ventures, DAG Ventures, Bezos Expeditions and Google Ventures.

—By CNBC's Erin Barry & Marqui Mapp

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