According to the complaint, during the Class Period, defendants misrepresented and/or failed to disclose that: (i) Nextdoor’s financial results prior to the Merger had been inflated by the short-term effects of the COVID-19 pandemic, which had pulled forward demand for Nextdoor’s platform and cannibalized future advertising revenue growth; (ii) growth trends had already begun to reverse; (iii) Nextdoor’s total addressable market was materially smaller than the 312 million households represented to investors; and (iv) by the start of the Class Period, Nextdoor’s most important market – the U.S. market – was already substantially saturated, impairing Nextdoor’s ability to monetize users and increase its average revenue per weekly active user (“ARPU”) or U.S. weekly active users (“WAUs”).

On March 1, 2022, Nextdoor reported that Q4 2021 revenue growth had declined sequentially by 18% to 48%, down from the 66% growth rate in the most recent quarter reported to investors. In addition, Nextdoor reported quarterly ARPU of $1.65, a substantial decline of 26% to just 12% from 38% growth in Q3 2021. This indicated that Nextdoor’s ability to monetize its platform was faltering. On this news, the price of Nextdoor common stock declined approximately 14%.

Next, on May 10, 2022, Nextdoor revealed that its global WAU growth had increased just 1% and that U.S. WAUs had actually suffered a sequential decline of approximately one hundred thousand users. On this news, the price of Nextdoor shares fell approximately 8%.

Thereafter, on August 9, 2022, the Company revealed that its platform continued to materially decline in Q2 2022, reporting that revenue growth had slowed to just 19% during the quarter and that Nextdoor’s U.S. WAUs had declined for the second quarter in a row to 29.2 million. On this news, the price of Nextdoor shares fell approximately 25%.

Finally, on November 8, 2022, Nextdoor reported that its Q3 2022 revenues declined by $1 million sequentially, to $54 million, and that the Company’s quarterly ARPU growth was increasingly negative, contracting by 12% compared to the prior year quarter. On this news, the price of Nextdoor Class A common stock fell approximately 11%, further damaging investors.

Investors who purchased or acquired Nextdoor Holdings securities between July 6, 2021 and November 8, 2022, may no later than April 29, 2024, seek to be appointed as a lead plaintiff representative of the class.