Reddit Raises $700M in Series F Funding

Reddit Secures Significant Funding, Eyes IPO

Earlier in the year, Reddit successfully obtained $250 million in funding, elevating the total investment in the 16-year-old platform to approximately $800 million. Today, the company revealed intentions for an even larger financial influx, spearheaded by a Series F funding round led by Fidelity.

Confirmation from Reddit to TechCrunch indicates that $410 million has been raised to date, with ambitions to reach up to $700 million. This positions Reddit at a substantial $10 billion valuation.

Allocation of Funds

The company states that the acquired funding will be directed towards enhancing both community features and advertising capabilities, as well as expanding its workforce.

“These initiatives necessitate the expansion of our teams and strategic investments in improving Reddit’s functionality, speed, user experience, and the empowerment of its communities,” Reddit explained. “We are also undergoing business evolution, maturing, and establishing operational frameworks to ensure future progress with transparency and integrity.”

Recent Growth and Key Events

As previously reported in February, Reddit played a pivotal role in the volatile stock market activity surrounding companies such as GameStop and AMC during an unusual period. This was largely driven by activity within the r/WallStreetBets subreddit.

The platform also launched a Super Bowl advertisement at the beginning of 2021. These events contributed to a doubling of the company’s valuation, reaching $6 billion.

Financial Performance and Expansion

Currently, the momentum appears to be sustained. Reddit achieved a milestone in Q2 by surpassing $100 million in advertising revenue, representing a 192% increase compared to the same quarter the previous year.

The site now boasts 50 million daily visitors and hosts 100,000 active subreddits. In March, Drew Vollero joined the company as its inaugural CFO, bringing experience from assisting with Snap’s IPO four years earlier.

IPO Considerations

In a recent interview with The New York Times, co-founder Steve Huffman mentioned that another funding round wasn’t initially planned, but the offer from Fidelity proved too advantageous to decline.

He further stated that this funding will also be instrumental in Reddit’s preparations for a future IPO.

“While an IPO remains our goal, a definitive timeline has not yet been established,” Huffman conveyed to the publication. “Prudent companies should pursue public offerings when the conditions are favorable.”