Popular online public discussion forum Reddit Inc. has announced that it has doubled its valuation to currently rest at $6 billion after it raised more than $250 million in a Series E funding round from new and existing investors, led by venture-capital firm Vy Capital.
The company had raised around $300 million in its last funding round in 2019. Current Reddit investors include venture-capital firm Andreessen Horowitz and internet conglomerate Tencent Holdings Ltd.
Reddit never seems to stay out of the headlines – it had garnered worldwide attention in the recent GameStop controversy which saw trading platform Robinhood raise funds to meet soaring demands.
The company said in a statement that it has decided that “now was the right opportunity to make strategic investments in Reddit including video, advertising, consumer products, and expanding into international markets.” It added that it was ready to double the number of Reddit employees in 2021.
“It’s a good market to fundraise,” Reddit Chief Executive Steve Huffman said. “Valuations are very high right now. It never hurts to raise money when there’s an opportunity to do so and Reddit had a strong year.” He added that Reddit’s advertising revenue had increased by 90% in the final quarter from a year earlier.
The company is riding the waves at the moment. Its role in the GameStop controversy saw the San-Francisco-based company experience record downloads and traffic. The Reddit app on mobile phones saw a record 6.6 million installs in January, globally, an increase of 43% month-over-month from 4.6 million in December. It had 52 million daily active users in December 2020.
2021 marks the 16th year of operation of Reddit. The company has raised more nearly $800 million till date.
“We have come a long way in recent years to focus more on the needs of the hundreds of thousands of communities that make up Reddit and on creating feature-rich, safe, engaging spaces for meaningful conversations for our 50+ million daily users,” the company said. It added that it had continue to scale its advertising business, which was “now poised to deliver performance and engagement in addition to brand awareness.”
Reddit says it would continue to invest in building and improving the ways people connected on the platform. The company had acquired short-video platform Dubsmash in December to create highly polished video creation tools.