US-based social media platform operator Reddit confirmed yesterday that it has secured $300m in a series D round led by an $150m investment from internet group Tencent.
The round valued the company at $3bn post-money and also included undisclosed existing backers. The size of the round and Tencent’s contribution was originally reported by TechCrunch last week.
Reddit runs an online social platform with 330 million monthly active users subdivided into a range of self-moderated ‘Subreddits’ arranged by theme. It generated about $85m in revenue in 2018, a source told TechCrunch, but it is looking to hike that revenue through building up advertising.
Steve Huffman, Reddit’s chief executive, told CNBC: “We are reinventing the ads business, both on the technology side and our ability to sell it and to create a friendly home for users and brands alike.
“So we have made steady progress on all of these fronts over the last year, and we feel pretty proud of where we are. And as a result we are seeing a lot of attention from both brands and investors.”
Reddit itself is banned in China, where Tencent is headquartered, and the investment has triggered concerns among some commentators that censorship could increase on the platform, which periodically faces teething problems attempting to fit commercial appeal with a user base that treasures it as a bastion of free speech.
The corporate has already invested substantially in another social app, Snap, and Huffman implied its interest could be related to the amount of gaming content on Reddit. Tencent is the largest game publisher in the world by revenue.
Condé Nast, part of media group Advance Publications, acquired Reddit in 2006 but it was spun off in 2014 through a $50m series B round led by Sam Altman and backed by additional private investors as well as venture capital firms Sequoia Capital and Andreessen Horowitz.
Reddit added $200m in a July 2017 series C round featuring, Andreessen Horowitz, Sequoia, Altman, investment and financial services group Fidelity, Coatue Management, Vy Capital and Ron Conway that valued it at $1.8bn post-money, with Condé Nast keeping hold of a majority stake.
