Reddit raises $250 million after users fueled stock market craze
The funding, led by Vy Capital, pushes the company’s valuation to $6 billion, the Wall Street Journal reported. Reddit intends to spend the cash to develop its advertising business, expand internationally and add video tools.
Reddit Inc. said it raised $250 million from private investors, riding a wave of attention after users of the social media website drove a stock market frenzy.
Founded in 2005, Reddit allows anyone to submit posts or links to articles and asks the community to vote each one up or down. It slowly went mainstream and is one of the most visited sites in the U.S. Reddit has been a birthplace for some of the internet’s most well-known memes, as well as conspiracy theories and harassment campaigns.
The stock market volatility of recent weeks was orchestrated by a forum on the site called WallStreetBets. GameStop Corp., AMC Entertainment Holdings Inc. and silver were some of the bizarre targets of the movement, which had the stated goal of squeezing hedge funds that were selling those assets short.
Reddit capitalized on the attention by running a five-second commercial during the Super Bowl that obliquely paid homage to WallStreetBets. Those five seconds ate up Reddit’s “entire marketing budget,” the ad reads. It should be able to afford more airtime after the new investment.
By Priya Anand