Two weeks after Reddit had announced a Series E funding round of $250 million, it has announced in a new SEC filing that addition of over $116 million was being added to the event, bringing the total to $367 million. This move highlights Reddit’s aim to raise up to $500 million in this funding round.
A Reddit spokesperson said that the additional capital came from the company’s “new and existing investors” without naming anyone. He did confirm that the new capital did not come with a new valuation, thus making no change to Reddit’s previously announced valuation of $6 billion pre-money.
Reddit, which has dubbed itself as “the front page of the internet,” has made recent headlines due to the role of the subreddit r/WallStreetBets in the steep rise and subsequent fall of GameStop’s stock.
Things had escalated to the point that trading platforms like Robinhood had to raise capital from both new and existing investors to help manage the soaring demands and ease restrictions on the trading of stocks. This move by Robinhood came shortly after it had halted the purchase of GameStop stock due to the surge in trading volume in stocks.
If the GameStop controversy is not enough, Reddit has made headlines over the resignation of co-founder Alexis Ohanian over moderation concerns.
2021 marks the 16th year of Reddit, which has raised around $800 million to date. However, the company is not done. According to the SEC filing, it aims to raise up to $500 million as part of this funding round. The platform’s growth has been massively fueled by the Gamestop controversy, and at the moment, Reddit is riding the waves of notoriety. Thus, the company’s plan to raise more capital to make good use of this wave is not surprising, and we expect more news to come out in this matter very soon.