The popular message board Reddit has agreed to a preliminary deal to sell 10pc of the company for US$50m at the same time it locks down attempts to share recent celebrity nude images.
This latest round of fundraising and sale would put the website at a valuation of about US$500m with Andreessen Horowitz and Sequoia Capital, considered to be likely investors, according to Re/code.
The website, which calls itself ‘the front page of the internet’, has the media company Condé Nast as its largest shareholder following a previous fundraising effort back in 2006. This latest round of funding will still see it owning half of Reddit’s shares.
However, the timing of this round of funding comes amid turmoil within the Reddit community, after the subreddit which had been linking a considerable amount of the nude images of celebrities has been taken down.
Promotion of free speech
In a post entitled ‘Every Man Is Responsible For His Own Soul’, Reddit’s CEO Yishan Wong explained that the subreddit had been taken down not for the content itself, but because of the number of DMCA (Digital Millennium Copyright Act) requests sent by the lawyers of the celebrities involved.
He continued that the policies of the website regarding incidents such as this will remain unchanged but emphasised the need for the individual’s right to free speech.
“We uphold the ideal of free speech on Reddit as much as possible not because we are legally bound to, but because we believe that you – the user – has the right to choose between right and wrong, good and evil, and that it is your responsibility to do so.
“When you know something is right, you should choose to do it. But as much as possible, we will not force you to do it.”
For future investors, the major question that needs to be addressed is how to monetise a site that has, up until now, been wary of introducing monetary ideas to a free website. However, recent moves, such as the appointment of Ellen Pao to head Reddit’s business operations, indicate a change in direction.
Reddit image via Shutterstock