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The company said on Thursday that Reddit, the virtual town square for the consumer internet, has raised $410 million in new funding, valuing it at more than $10 billion.
The funding, led by Fidelity Investments, boosts Reddit’s value from the $6 billion it raised six months ago. When 250 million dollars are collected. Reddit said it expects existing investors to also participate in the latest funding, so the round will grow to close at around $700 million.
The latest funding was unplanned, but “Fidelity made us an offer we couldn’t refuse,” Reddit co-founder and CEO Steve Huffman said in an interview.
The company then decided that it would give the capital more time to decide when – and how. go public. “We still plan to go public, but we don’t have a firm timeline yet,” Mr. Huffman said. “All good companies should go public when they can.”
The move gives Reddit more war chests to build its business and attract new users. The company makes most of its money from the sale of advertisements that appear in the posts of users who browse the many “subdirectories” or topic-focused forums throughout the site.
But Reddit must compete against digital ad giants like Google, Facebook and Amazon, as well as other ad-based social networking sites including Twitter, Snap and Pinterest.
“We grew up in the shadow of Facebook and Google and had to fight for almost every dollar we earned,” Mr. Huffman said.
Still, he said the company’s advertising products are starting to work better. Reddit surpassed $100 million in a single quarter for the first time this year, up 192 percent from the same period in 2020.
More than 50 million people now visit Reddit daily, and the site has more than 100,000 active subreddits. While he previously took a laissez-faire approach to free speech regardless of toxicity, Mr. Huffman has spent the last few years overhauling Reddit’s policies and policies. Making it harder for trolls to bypass the forums.
Mr Huffman said the company will use the new funds to develop product features and focus on how to make it easier for newcomers to explore and quickly understand the site. Reddit is also developing its video products with an eye towards more advertising. And the company is building its self-service advertising system that can help appeal to small and medium business marketers.
Reddit is also focused on expanding internationally. Mr Huffman said most of the site is US-based – something he hopes to change.
“The product’s first priority is to make Reddit great,” he said. “We want to create the best for new users because over time it will be the best for everyone.”
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