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Nextdoor’s decision to go public through a special purpose acquisition company was largely the result of favorable pricing compared with a traditional IPO, said Bill Gurley, a partner at Benchmark and an early investor in the neighborhood social network.

Gurley has been among the most vocal supporters of direct listings, another IPO alternative in which companies go public without selling shares at a steep discount to new investors. He said the average IPO in 2020 came with a 57% cost of capital.

“SPACs are remarkably cheap compared to mispriced IPOs,” Gurley told CNBC’s “TechCheck” on Friday.

Nextdoor announced plans earlier this week to pursue a SPAC sponsored by an affiliate of Khosla Ventures, Vinod Khosla’s investment firm. In a SPAC, a so-called blank check company raises capital through a public offering and then shops around for a potential target, which becomes the operating entity after the transaction closes.

The pace of new SPACs slowed earlier this year after smashing a record in 2020 and setting a new high in the first quarter of this year. The pullback came after the SEC issued accounting guidance that would classify SPAC warrants as liabilities instead of equity instruments.

However, activity has resumed. In addition to Nextdoor, fintech company Circle, space companies Planet Labs and Satellogic and solar power firm Heliogen all announced deals this week. Still, the proprietary CNBC SPAC Post Deal Index, which is composed of the largest SPACs that have announced a target or those that have already completed a SPAC merger within the last two years, is down 3.8% in 2021, after tumbling in February and March.

Nextdoor’s transaction will bring in $686 million and value the company at $4.3 billion. Benchmark first invested in 2011 at a post-money valuation of just over $30 million, according to PitchBook.

The company says its site is now used in more than 275,000 neighborhoods around the world and in nearly 1-in-3 U.S. households. It allows users to organize events, sell or give away items and alert neighbors to danger. Earlier this year, Nextdoor debuted an anti-racism notification after long facing criticism for racist comments on its platform.

In 2018, Nextdoor hired Sarah Friar, who was finance chief at Square, as its new CEO, replacing the company’s founder, Nirav Tolia. Before that, Friar spent over a decade at Goldman Sachs.

Gurley said Friar ran all the numbers and closely considered an IPO before making the ultimate decision.

“Sarah Friar is an extremely experienced CEO with tons of Wall Street experience, both having worked at an investment bank and as CFO of a public company,” Gurley said. “She dual-tracked it, was looking at the IPO and just said I have more control and get better economics by going the SPAC route.”

Investing to fix the labor shortage

Gurley appeared on “TechCheck” alongside Sumir Meghani, the co-founder and CEO of Instawork, an online jobs marketplace. Instawork on Thursday announced it raised $60 million in a financing round led by Craft Ventures.

The start-up connects workers in the restaurant, hospitality and retail industries with hourly jobs at companies in need of labor. The transaction comes a week after Suzanne Clark, CEO of the U.S. Chamber of Commerce, told CNBC that the biggest problem facing American businesses is hiring enough qualified workers. She pointed to a lack of skilled labor, Covid-era jobless benefits, insufficient access to child care, and work visa restrictions.

“Our professionals make nearly double minimum wage,” Meghani said. “Our best professionals can make even more than that. They can get paid instantly when they clock out of a shift. We’re rewarding quality on Instawork with faster pay, higher pay but most of all flexibility.”

Gurley, who was one of the earliest backers of Uber, said Benchmark is focusing heavily on the category and has made about eight investments in “these types of marketplaces.”

— CNBC’s Pia Singh contributed to this report.

WATCH: U.S. Chamber of Commerce CEO on infrastructure outlooks

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Google agrees to pay Texas $1.4 billion data privacy settlement

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Google agrees to pay Texas .4 billion data privacy settlement

A Google corporate logo hangs above the entrance to the company’s office at St. John’s Terminal in New York City on March 11, 2025.

Gary Hershorn | Corbis News | Getty Images

Google agreed to pay nearly $1.4 billion to the state of Texas to settle allegations of violating the data privacy rights of state residents, Texas Attorney General Ken Paxton said Friday.

Paxton sued Google in 2022 for allegedly unlawfully tracking and collecting the private data of users.

The attorney general said the settlement, which covers allegations in two separate lawsuits against the search engine and app giant, dwarfed all past settlements by other states with Google for similar data privacy violations.

Google’s settlement comes nearly 10 months after Paxton obtained a $1.4 billion settlement for Texas from Meta, the parent company of Facebook and Instagram, to resolve claims of unauthorized use of biometric data by users of those popular social media platforms.

“In Texas, Big Tech is not above the law,” Paxton said in a statement on Friday.

“For years, Google secretly tracked people’s movements, private searches, and even their voiceprints and facial geometry through their products and services. I fought back and won,” said Paxton.

“This $1.375 billion settlement is a major win for Texans’ privacy and tells companies that they will pay for abusing our trust.”

Google spokesman Jose Castaneda said the company did not admit any wrongdoing or liability in the settlement, which involves allegations related to the Chrome browser’s incognito setting, disclosures related to location history on the Google Maps app, and biometric claims related to Google Photo.

Castaneda said Google does not have to make any changes to products in connection with the settlement and that all of the policy changes that the company made in connection with the allegations were previously announced or implemented.

“This settles a raft of old claims, many of which have already been resolved elsewhere, concerning product policies we have long since changed,” Castaneda said.

“We are pleased to put them behind us, and we will continue to build robust privacy controls into our services.”

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Virtual chronic care company Omada Health files for IPO

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Virtual chronic care company Omada Health files for IPO

Omada Health smart devices in use.

Courtesy: Omada Health

Virtual care company Omada Health filed for an IPO on Friday, the latest digital health company that’s signaled its intent to hit the public markets despite a turbulent economy.

Founded in 2012, Omada offers virtual care programs to support patients with chronic conditions like prediabetes, diabetes and hypertension. The company describes its approach as a “between-visit care model” that is complementary to the broader health-care ecosystem, according to its prospectus.

Revenue increased 57% in the first quarter to $55 million, up from $35.1 million during the same period last year, the filing said. The San Francisco-based company generated $169.8 million in revenue during 2024, up 38% from $122.8 million the previous year.

Omada’s net loss narrowed to $9.4 million during its first quarter from $19 million during the same period last year. It reported a net loss of $47.1 million in 2024, compared to a $67.5 million net loss during 2023.

The IPO market has been largely dormant across the tech sector for the past three years, and within digital health, it’s been almost completely dead. After President Donald Trump announced a sweeping tariff policy that plunged U.S. markets into turmoil last month, taking a company public is an even riskier endeavor. Online lender Klarna delayed its long-anticipated IPO, as did ticket marketplace StubHub.

But Omada Health isn’t the first digital health company to file for its public market debut this year. Virtual physical therapy startup Hinge Health filed its prospectus in March, and provided an update with its first-quarter earnings on Monday, a signal to investors that it’s looking to forge ahead.

Omada contracts with employers, and the company said it works with more than 2,000 customers and supports 679,000 members as of March 31. More than 156 million Americans suffer from at least one chronic condition, so there is a significant market opportunity, according to the company’s filing.

In 2022, Omada announced a $192 million funding round that pushed its valuation above $1 billion. U.S. Venture Partners, Andreessen Horowitz and Fidelity’s FMR LLC are the largest outside shareholders in the company, each owning between 9% and 10% of the stock.

“To our prospective shareholders, thank you for learning more about Omada. I invite you join our journey,” Omada co-founder and CEO Sean Duffy said in the filing. “In front of us is a unique chance to build a promising and successful business while truly changing lives.”

WATCH: The IPO market is likely to pick up near Labor Day, says FirstMark’s Rick Heitzmann

The IPO market is likely to pick up near Labor Day, says FirstMark's Rick Heitzmann

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Google would need to shift up to 2,000 employees for antitrust remedies, search head says

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Google would need to shift up to 2,000 employees for antitrust remedies, search head says

Liz Reid, vice president, search, Google speaks during an event in New Delhi on December 19, 2022.

Sajjad Hussain | AFP | Getty Images

Testimony in Google‘s antitrust search remedies trial that wrapped hearings Friday shows how the company is calculating possible changes proposed by the Department of Justice.

Google head of search Liz Reid testified in court Tuesday that the company would need to divert between 1,000 and 2,000 employees, roughly 20% of Google’s search organization, to carry out some of the proposed remedies, a source with knowledge of the proceedings confirmed.

The testimony comes during the final days of the remedies trial, which will determine what penalties should be taken against Google after a judge last year ruled the company has held an illegal monopoly in its core market of internet search.

The DOJ, which filed the original antitrust suit and proposed remedies, asked the judge to force Google to share its data used for generating search results, such as click data. It also asked for the company to remove the use of “compelled syndication,” which refers to the practice of making certain deals with companies to ensure its search engine remains the default choice in browsers and smartphones. 

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Google pays Apple billions of dollars per year to be the default search engine on iPhones. It’s lucrative for Apple and a valuable way for Google to get more search volume and users.

Apple’s SVP of Services Eddy Cue testified Wednesday that Apple chooses to feature Google because it’s “the best search engine.”

The DOJ also proposed the company divest its Chrome browser but that was not included in Reid’s initial calculation, the source confirmed.

Reid on Tuesday said Google’s proprietary “Knowledge Graph” database, which it uses to surface search results, contains more than 500 billion facts, according to the source, and that Google has invested more than $20 billion in engineering costs and content acquisition over more than a decade.

“People ask Google questions they wouldn’t ask anyone else,” she said, according to the source.

Reid echoed Google’s argument that sharing its data would create privacy risks, the source confirmed.

Closing arguments for the search remedies trial will take place May 29th and 30th, followed by the judge’s decision expected in August.

The company faces a separate remedies trial for its advertising tech business, which is scheduled to begin Sept. 22.

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