By
Chimamanda U. Martha
May 17th, 2024
After raising funds in its Series E round, Reddit’s value has now reached $6 billion. Back in February 2019, its value was only $3 billion.
A fresh round of funding has seen Reddit Inc double its valuation. The social media company in February raised $250 million taking its value to $6 billion. The company is looking to make strategic investments and expand the company’s portfolio.
Reddit has in the last couple of weeks been a favorite among retail investors. According to one of the company’s blog posts, its advertisement revenues rose by 90% in the last quarter. Coupled with a rush of new users, the company saw an opportunity to seize it all with a fresh round of funding.
Reddit Funding
According to Reddit Chief Executive Officer Steve Huffman, it is a good time to raise funds.
Speaking to the WallStreet Journal, he noted:
“Valuations are very high right now. It never hurts to raise money when there’s an opportunity to do so and Reddit had a strong year.”
After raising funds in its Series E round, Reddit’s value has now reached $6 billion. Back in February 2019, its value was only $3 billion. The social media company has now doubled its value and looks set to continue growing at the same rate in the coming years.
On a blog post, Reddit specified that it was now looking to make strategic investments with the fresh sound in a number of avenues. The company wrote:
“We decided that now was the right opportunity to make strategic investments in Reddit including video, advertising, consumer products, and expanding into international markets.”
If successfully executed, the company is set to see its revenues further rise in 2021. In the first quarter, returns from the new investments are unlikely but the second and third profits are likely to stream in.
Reddit was founded in 2005 but has only become a major player in the last few years. Its popularity has been growing exponentially in recent years with the latest figures showing the platform has around 50 million users. The network now looks set to be a major social media site. The site offers a unique way for its users to interact. The platform allows anyone to post questions/articles/photos which can be voted up or down by the community.
Reddit Recent Controversy
Reddit drew some controversial attention last month. GameStop Corporation (NYSE: GME) pump orchestrated by Reddit’s WallStreetBets group brought interest into Reddit with many curious to know the type of discussions going on in the platform.WallStreetBets pumped GameStop shares after realizing a number of hedge funds were shorting it. This group’s intervention saw GameStop shares explode which led some hedge funds shorting the stock to incur huge losses.
This move was celebrated as a big win for ‘the little guy against the big corporates’ and was looking like it would grow into a trend. But the move has since not been repeated.