Reddit Inc. doubled its valuation to $ 6 billion in a new round of funding that comes as the social media company added users through the Covid-19 pandemic and more recently received attention for its role in the recent Wall Street trading frenzy.
Reddit said on Monday it raised $ 250 million in a late round of funding led by venture capital firm Vy Capital. Previously, it was valued at $ 3 billion after its last round of funding in February 2019, according to PitchBook, a private market data provider. Current investors in Reddit also include venture capital firm Andreessen Horowitz and internet conglomerate Tencent Holdings Ltd.
“It’s a good market to raise money,” Steve Huffman, CEO of Reddit, said in an interview. “Valuations are currently very high. It never hurts to raise money when there is the opportunity to do so and Reddit had a strong year. For example, ad revenue for the company was up 90% in the quarter ending from a year earlier, he said.
Funding for Reddit comes just weeks after fledgling audio chat social network Clubhouse raised new capital. Clubhouse was valued at $ 1 billion last month after securing $ 100 million in a funding round led by Andreessen, according to PitchBook.
Founded in 2005, San Francisco-based Reddit is known for its bulletin boards on a variety of topics, as well as its digital town halls featuring celebrities, politicians, and subject matter experts. The company, which is not profitable, was sold to Condé Nast in 2006 and the magazine publisher’s parent company, Advance Publications Inc., spun off Reddit in 2011 and remains a shareholder. The company has raised approximately $ 800 million since 2011.