The company will use the fresh funding to expand internationally and bolster its advertising offerings.
Reddit is to be valued at $10bn after the social platform announced yesterday (12 August) that it is raising $700m in Series F funding to invest in its international expansion.
The funding round will be led by Fidelity Investments and Research Company and will include other existing investors. Reuters reports that the company has raised $410m from Fidelity.
It comes after the self-declared ‘front page of the internet’ raised $250m in Series E funding at the beginning of the year, in a move that valued the company at a reported $6bn. Existing investors include Sequoia Capital and Andreessen Horowitz.
Since then, Reddit has hired its first chief financial officer, Drew Vollero, and marked its first quarter generating $100m in advertising revenue, with performance in Q2 of this year representing a 192pc increase compared to the same period last year.
The social news site said it is now making strategic investments to expand its business, finding new ways to build its community and bolster advertising. The intended expansion includes increased use of video and audio.
In April, Reddit launched its own live audio feature, Reddit Talk, to take on Clubhouse and join the growing trend of social media companies rolling out audio platforms, including Facebook and Twitter. At the end of last year, Reddit also acquired Dubsmash, a short-form video social platform and competitor of TikTok.
“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,” Reddit said in a blog post announcing its fresh funding.
“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.”
Reddit pointed to its recent business expansions in the UK, Canada and Australia, and said that there are “more countries to come”.
The San Francisco-based company was founded in 2005 by CEO Steve Huffman along with Alexis Ohanian and Aaron Swartz. It revealed at the end of 2020 that it has more than 50m daily active users.
Reddit made headlines earlier in the year for the platform’s role in the GameStop hedge fund saga. The incident led to GameStop’s stock price soaring and Huffman along with several other company leaders being brought before a US congressional hearing to determine whether market manipulation took place.