Reddit, announced on Thursday it is now valued at more than $10 billion after raising an additional $410 million in funding, with the final round expected to grow to up to $700 million.
The round was led by Fidelity Investments to push the valuation of the self-proclaimed ‘front page of the internet’ up.
The company has continued to build and sanitize its business, removing racist, misogynist, and otherwise controversial communities, as it prepares to go public at some point in the future.
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“We are still planning on going public, but we don’t have a firm timeline there yet,” Reddit’s co-founder and CEO Steve Huffman told The New York Times in an interview. “All good companies should go public when they can.”
The company previously raised $250 million in funding earlier this year for a valuation of $6 billion. But Huffman told the Times the company was approached with this recent financing round by Fidelity Investments and were made “an offer that we couldn’t refuse.”
Reddit makes most its money from advertising on the site, and although it’s a minnow compared to the likes of Facebook and Google, it’s growing its business quickly. The company says it made $100 million in advertising revenue in the second quarter of 2021, up 192 percent compared to the same period last year. Though for context, Google made $61.9 billion in this year’s second quarter, mostly from YouTube and Search advertising.
However, Huffman said the social media platform has come a long way.
“We’ve grown up in the shadow of Facebook and Google, and pretty much every dollar we make we’ve had to fight for,” he said.
Reddit now has roughly 52 million daily users (compared to 1.85 billion daily Facebook users) and more than 100,000 active sub-reddits. Earlier this year, the company said it planned to double its staff count by the end of 2021 to around 1,400 employees.
Huffman told the Times that the new funding would be used to improve product features, focusing on how to make the site easier for first-time users and help its communities expand internationally. He said Reddit is working to enhance its video products to expand its advertising revenue, part of it is its self-service advertising system targeting small and medium-size business marketers.
“The first priority on the product is just making Reddit awesome,” he told Times. “We want to build what is best for new users, because over time it will be best for everyone.”
Part of the plan is expanding internationally. Huffman said the platform has been US-focused and he intends to change that.