Reddit is Raising Up to $700 Million in Series F Funding
Reddit has announced plans for massive funding, with a Series F led by Fidelity. The company confirmed with TechCrunch that it has raised $410 million thus far, with plans to raise up to $700 million, putting Reddit at a $10 billion valuation. The company says the funding will go toward building out the community and advertising efforts and increasing headcount.
Reddit said in a blog post, “These efforts require us to grow our teams and make smart bets on how to make Reddit better, faster, easier to use, and more empowering for communities. We are also evolving as a business, maturing, and building the operational structures that will help propel us into the future with transparency, values, and integrity.”
This comes after Reddit raised $250 million earlier this year, bringing the 16-year-old site up to around $800 million in total funding. As noted back in February, an extraordinarily strange couple of years found the content aggregation service playing a key role in stock figures for companies like GameStop and AMC, by way of the r/WallStreetBets subreddit. It also kicked off 2021 with a short Super Bowl spot. All of that helped lead to a doubling of the company’s valuation to $6 billion.
In an interview with The New York Times, co-founder Steve Huffman notes that it hadn’t planned to raise another round so quickly, but ultimately couldn’t turn down what Fidelity was offering. He adds that the funding will also factor into Reddit’s eventual IPO plans. He told the paper, “We are still planning on going public, but we don’t have a firm timeline there yet. All good companies should go public when they can.”
As of January, Reddit had more than 52 million daily active users and over 100,000 communities, dwarfed by Facebook’s nearly 2 billion daily active users in June or Twitter’s 206 million monetizable daily active users, a term for users who see the ads placed on their platforms.
In Q2, Reddit broke $100 million in advertising revenue for the first time, marking a 192% year-over-year increase for the quarter. The site now attracts 50 million daily visitors and hosts 100,000 active subreddits. In March, it announced Drew Vollero would be joining as the site’s first-ever CFO, after assisting with Snap’s IPO efforts four years prior.
On the back of the trading frenzy, Reddit’s value had already doubled to $6 billion in February from a year ago. Although a hefty sum, the $10 billion valuation pales in comparison to Twitter Inc’s (TWTR.N) $52 billion or the $1 trillion value of Facebook Inc (FB.O), both founded around the same time as Reddit.