SAN FRANCISCO – Reddit announced Monday that it raised $ 250 million in new funds to valorise the social news startup at $ 6 billion, increase user growth and double its workforce.
The investment is a shot in the arm of Reddit, which has been focusing on building digital communities around topic-based message boards since 2005. The latest funding, led by Vy Capital with the participation of previous investors such as Andreessen Horowitz, Sequoia Capital, and Tencent Holdings, doubles Reddit’s rating from its last funding in 2019.
San Francisco-based Reddit said the funding is building on the success of its burgeoning advertising business as brands and marketers are drawn to the site’s powerful and active community members.
“We have come a long way in the past few years to focus more on the needs of the hundreds of thousands of communities that make up Reddit,” the company said in a blog post. “We are committed to Reddit because we believe in the power of communities to create a sense of belonging and connection that is as real as the one we do offline.”
Reddit has been very visible for the past few days. Video games retailer GameStop’s shares rose sharply last month as users of Reddit’s WalldreetBets forum, known as the “Subreddit,” encouraged each other to buy the stock, in part to include hedge funds that had bet on it. that the stock would fall.
That put GameStop’s stock on an extraordinary and volatile ride. After a flood of media attention, the WallStreetBets forum grew to more than seven million members. Several rights to book and movie options were bought through the saga, with the prospect of fame and money embroiling the forum’s moderators in bitter disputes.
Reddit also received widespread praise for a five-second commercial that aired during the Super Bowl on Sunday, which became one of the most talked about ads on a day when many ads were discussed. Reddit’s ad, which had viewers pausing their television screens to read it, announced, “Wow, that actually worked.” Viewers searched for screenshots of one of the shortest Super Bowl ads ever posted on social media.
Reddit has been controversial over the years. The company has long been criticized for its laissez-faire approach to content moderation, which allowed racist, sexist, and troll-rich communities to flourish. At one point, Reddit refused to remove sub-forums devoted to racist commentary, citing the need for free and unqualified speech.
In recent years, the company has changed its attitude towards content moderation. Since Steve Huffman, a Reddit co-founder, returned as CEO in 2015, the startup has revamped and refined its content guidelines. Reddit has blocked communities from Nazis and other far-right contingents. In June, The_Donald, a sub-forum dedicated to supporters of President Donald J. Trump, banned it. The company had repeatedly violated its rules on harassment and other conduct.
Reddit said it plans to use the new capital injection to grow its community of more than 50 million daily active users. This includes courting more influencers and content creators. This was done when the short-form video platform Dubsmash, a rival of TikTok, was bought in December. Reddit, which has more than 700 employees, also said it would double that number this year.