Fairfax Media has joined Seven West Media and Westpac-backed venture capital firm Reinventure as a major shareholder in Australian neighbourhood hyper-local social media network Nabo.
Fairfax, publisher of The Australian Financial Review, The Sydney Morning Herald and The Age, has bought 25 per cent of Nabo, which launched in November 2014.
The terms of the deal were not disclosed, but it is understood the deal was not material to Fairfax.
The business launched with $2.25 million in funding last year secured from investors including Seven and Reinventure.
Seven and Reinventure both hold 25 per cent stakes in Nabo, while the final quarter of the company remains with founder Adam Rigby and the business’ staff.
The social media network connects neighbourhood residents with local organisations and councils and has formed partnerships with groups like Crimestoppers NSW.
Nabo is modelled on a similar US business called Nextdoor. Founded in 2010, Nextdoor earlier this year raised $US110 million, valuing the business at $US1.1 billion.
Nextdoor has been credited with helping reduce crime in some areas of the United States thanks to its localised network allowing neighbours to post community news, warnings and photos.
The company said it had grown membership by 720 per cent since January this year and now operates in more than 5800 suburbs.
“This is a compelling investment for Fairfax. Nabo is a social network connecting people to their neighbours and broader community in a safe and friendly way. The digital business strongly aligns with Fairfax’s long history of connecting communities via hundreds of newspapers and websites across rural, regional and metropolitan areas,” said Fairfax Media managing director of Australian Publishing Media, Allen Williams.
“Nabo complements our investment in New Zealand’s leading local social network, Neighbourly, which has achieved tremendous growth by leveraging our large-scale audiences. We believe Nabo has similar potential in the Australian market and we look forward to working closely with the team to strengthen its offering and achieve its full potential.”
Nabo founder and former chief executive of deals website business LivingSocial, Adam Rigby, welcomed Fairfax as a shareholder.
“With a long established and very well regarded media presence in Australia across online, print and radio, Fairfax are a great fit for Nabo as we continue national growth over the months ahead,” Mr Rigby said.