Khosla Ventures Acquisition Co. II
PROPOSED BUSINESS COMBINATION: Nextdoor, Inc.
ENTERPRISE VALUE: $3.538 billion
ANTICIPATED SYMBOL: KIND
Khosla Ventures Acquisition Co. II proposes to combine with Nextdoor, Inc., the neighborhood network.
Nextdoor is the app where you connect to the neighborhoods that matter to you. Nextdoor’s purpose is to cultivate a kinder world where everyone has a neighborhood they can rely on. Neighbors around the world turn to Nextdoor daily to receive trusted information, give and get help, and build real-world connections with those nearby — neighbors, businesses, and public services. Today, neighbors rely on Nextdoor in more than 275,000 neighborhoods across 11 countries. In the U.S., nearly 1 in 3 households use Nextdoor.
Nextdoor’s business combination with KVSB will provide access to new capital, which will be used to accelerate Nextdoor’s growth plans including hiring, expanding monetization, and continuing to develop products to build stronger, more vibrant, and resilient neighborhoods.
Growth Strategies
- Increasing neighbors in our network by introducing new products and expanding in markets around the globe;
- Increasing engagement on our platform by making it easier to engage, share interests, and create meaningful connections; and
- Increasing monetization on our platform by scaling our proprietary advertising platform that can service clients from the largest advertisers in the world to small local businesses and neighbors for hire.
TRANSACTION
- Concurrently with the consummation of the transaction, additional investors have committed to purchase shares of Class A common stock of KVSB at $10.00 per share in a private placement (the “PIPE”) to occur concurrently with the proposed business combination.
- The upsized $270 million PIPE investment includes participation from institutional investors, including funds and accounts advised by T. Rowe Price Associates, Inc., Baron Capital Group, Dragoneer, Soroban Capital, accounts advised by ARK Invest, and ION Asset Management, in addition to existing Nextdoor investors Tiger Global and Hedosophia.
- Nextdoor CEO Sarah Friar and Khosla Ventures affiliates each participated in the PIPE financing.
- Approximately $416 million in cash held in the KVSB trust account, together with the approximately $270 million in PIPE proceeds, excluding transaction expenses, will be used to support new and existing growth initiatives.
PIPE
- $270 million PIPE investment
- Accounts advised by T. Rowe Price Associates, Inc., Baron Capital Group, Dragoneer, Soroban Capital, accounts advised by ARK Invest, and ION Asset Management, in addition to existing Nextdoor investors Tiger Global and Hedosophia.
- Nextdoor CEO Sarah Friar and Khosla Ventures affiliates each participated in the PIPE financing.
HIGH VOTE STRUCTURE
- Following the Closing, and subject to approval by KVSB’s stockholders, the New Nextdoor Class B common stock will have 10 votes per share and the New Nextdoor Class A common stock will have one vote per share.
- Because of the 10-to-one voting ratio between the New Nextdoor Class B common stock and the New Nextdoor Class A common stock, the holders of the New Nextdoor Class B common stock, which will consist of the former stockholders of Nextdoor, the Sponsor, and upon exercise or settlement, holders of Nextdoor stock options, restricted stock units, and other other equity awards outstanding as of immediately following the Closing, collectively will control a majority of the combined voting power of KVSB following the Closing and therefore will be able to control all matters submitted to KVSB’s stockholders for approval until the earlier of:
- (i) the date specified by a vote of the holders of 66 2/3% of the then outstanding shares of New Nextdoor Class B common stock and
- (ii) ten years from Closing. This concentrated control will limit or preclude the ability of holders of New Nextdoor Class A common stock to influence corporate matters for the foreseeable future following the Closing, including the election of directors, amendments of KVSB’s organizational documents, and any merger, consolidation, sale of all or substantially all of KVSB’s assets, or other major corporate transaction requiring stockholder approval. In addition, this may prevent or discourage unsolicited acquisition proposals or offers for KVSB’s capital stock that a stockholder may feel are in the best interest of KVSB’s stockholders.
- Because of the 10-to-one voting ratio between the New Nextdoor Class B common stock and the New Nextdoor Class A common stock, the holders of the New Nextdoor Class B common stock, which will consist of the former stockholders of Nextdoor, the Sponsor, and upon exercise or settlement, holders of Nextdoor stock options, restricted stock units, and other other equity awards outstanding as of immediately following the Closing, collectively will control a majority of the combined voting power of KVSB following the Closing and therefore will be able to control all matters submitted to KVSB’s stockholders for approval until the earlier of:
LOCK-UP
- (a) The Holder hereby agrees not to, during the period commencing from the Closing and through [DATE: TBD] (the “Lock-Up Period”)
- (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option to purchase, make any short sale or otherwise dispose of or agree to dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Exchange Act of 1934, as amended (the “Exchange Act”)
- (ii) enter into any swap or hedging or other arrangement which is designed or intended to or which reasonably could be expected to lead to or result in a sale or disposition of the Restricted Securities
NOTABLE CONDITIONS TO CLOSING
- Cash held in trust is at least equal to or greater than $400,000,000.
NOTABLE CONDITIONS TO TERMINATION
- If the Closing has not occurred on or before April 6, 2022
ADVISORS
- Morgan Stanley & Co. LLC and Evercore Group L.L.C. are serving as joint-lead financial advisors to Nextdoor and placement agents to institutional investors for the PIPE to KVSB.
- Goldman Sachs & Co. LLC is serving as exclusive financial advisor to KVSB.
- Fenwick & West LLP is serving as legal counsel to Nextdoor.
- Latham & Watkins LLP is acting as legal counsel to KVSB.
- Simpson Thacher & Bartlett LLP is acting as legal counsel to Morgan Stanley and Evercore as placement agents to institutional investors to KVSB.
MANAGEMENT & BOARD
Executive Officers
Samir Kaul, 48
Chief Executive Officer, Director
Mr. Kaul has been a General Partner at Khosla Ventures, a venture capital firm, since February 2006 and currently serves on the boards of directors of several private and public companies, including Guardant Health and Jack Creek Investment Corp. Additionally, Mr. Kaul has served as President, Chief Executive Officer and Director of KV Acquisition I and KV Acquisition III since their inceptions in January 2021. Mr. Kaul holds a B.S. degree in Biology from the University of Michigan, an M.S. degree in Biochemistry from the University of Maryland and an M.B.A. degree from Harvard Business School. We believe that Mr. Kaul is qualified to serve as a member of our Board due to his wide-ranging experience in technology companies and insight in the management of startup companies and the building of companies from early stage to commercial scale.
Peter Buckland, 51
Chief Operating Officer, Chief Financial Officer, Treasurer and Secretary
Mr. Buckland has been a Partner, Managing Director and COO at Khosla Ventures since October 2019. Prior to joining Khosla Ventures, Mr. Buckland was a Partner at WilmerHale LLP, where he was Vice Chair of its Corporate Group and led the firm’s emerging growth technology practice. Additionally, Mr. Buckland has served as the Chief Operating Officer, Chief Financial Officer, Treasurer and Secretary of KV Acquisition I and KV Acquisition III since their inceptions in January 2021. Mr. Buckland received his bachelor’s degrees from the University of California Santa Barbara and his JD from the University of San Francisco School of Law.
Vinod Khosla, 66
Founder
Mr. Khosla is an entrepreneur, investor and technologist. In 2004, he founded Khosla Ventures, a venture capital firm. Mr. Khosla holds a Bachelor of Technology in Electrical Engineering from IIT Delhi, a Masters in Biomedical Engineering from Carnegie Mellon University and an MBA from Stanford Graduate School of Business. Mr. Khosla has authored numerous articles in the past about technology and the future of technology, including “Reinventing Societal Infrastructure with Technology (2018)”, “20% Doctor Included (2016)”, and “Critical Climate Technology Breakthroughs (2020)”. Additionally, Mr. Khosla was the Founder of KV Acquisition I and KV Acquisition III.
Board of Directors
Dmitri Shklovsky, 45
Director
Mr. Shklovsky is the founder and managing partner of Bullingham Capital, a New York based private investment firm. Prior to 2019, Mr. Shkolvsky was a co-founder and managing partner of Atreaus Capital, a multi-billion dollar global macro and commodities hedge fund with offices in New York and London. Before co-founding Atreaus Capital in 2011, he served as a proprietary trader at both J.P. Morgan and Barclays. Mr. Shklovsky was also with Tudor Investment Corporation, a leading multi-strategy hedge fund, and he began his career in 1998 at Long Term Capital Management, a Greenwich CT based hedge fund. Mr. Shklovsky is a trustee and a board member of the U.S. Olympic and Paralympic Foundation and serves on the Cornell University Engineering College Council. He received his B.S. in Computer Science and M.Eng. in Operations Research and Financial Engineering from Cornell University.
Anita Sands, 44
Director
Dr. Sands has served on the Board of Directors of ServiceNow, Inc. (NYSE: NOW) since July 2014. From April 2012 to September 2013, Dr. Sands served as Group Managing Director, Head of Change Leadership and a member of the Wealth Management Americas Executive Committee of UBS Financial Services, a global financial services firm. Prior to that, from April 2010 to April 2012, Dr. Sands was Group Managing Director and Chief Operating Officer of UBS Wealth Management Americas at UBS Financial Services, and from October 2009 to April 2010, Ms. Sands was a Transformation Consultant at UBS Wealth Management Americas. Prior to joining UBS Financial Services, Dr. Sands was Managing Director, Head of Transformation Management at Citigroup N.A.’s Global Operations and Technology organization. Dr. Sands also held several leadership positions with RBC Financial Group and CIBC. Dr. Sands has served on the board of directors of Symantec Corporation, a provider of security solutions, and currently serves on the board of directors of Pure Storage, Inc., a provider of enterprise flash storage solutions and iStar, a New York-based real estate development company. Dr. Sands holds a B.S. degree in Physics and Applied Mathematics from The Queen’s University of Belfast, Northern Ireland, a Ph.D. degree in Atomic and Molecular Physics from The Queen’s University of Belfast, Northern Ireland and an M.S. degree in Public Policy and Management from Carnegie Mellon University.
Enrico Gaglioti, 49
Director
Mr. Gaglioti has served as Co-President of FS Investments since 2020, an investment management firm where he shares oversight of the firm’s strategy. Prior to joining FS Investments, Mr. Gaglioti was the Co-Founder and CEO of Chiron Investment Management and a Partner at Goldman Sachs serving as the Global Head of Equity Sales. Mr. Gaglioti holds a BBA from James Madison University’s College of Business.