Reddit is making big plays in securing capital this year with another whopping round of funding driving up its value. The online community has announced a valuation of US$10 billion as it continues to expand its engagement in the crypto world.
Reddit has announced that it has raised US$410 million in a Series F round of funding led by Fidelity Management and Research LLC. Following this round, the valuation of Reddit goes up from US$6 billion, which it achieved six months ago, to an impressive US$10 billion. The company expects existing investors to take part in this round, bring the total amount raised to US$700 million.
Funding Not Planned
Steve Huffman, co-founder and chief executive of Reddit, said in an interview that the funding was not planned, but “Fidelity made us an offer that we could not refuse”. He went on to say that the capital will offer it more time to decide how and when it would go public.
We want to build what is best for new users, because over time it will be best for everyone.
Steve Huffman, Reddit CEO
The discussion board platform said it intends to use the capital to improve product features and wants to make the platform easier for newcomers to explore and understand.
Reddit, which makes most of its money from selling advertising wishes to enhance video products. Advertisements appear in the feeds of users who browse the topic-based forums, known as “subreddits”.
The company, with 52 million daily users, operates in the shadows of digital giants such as Twitter and Facebook. Twitter, with a valuation of US$52 billion, and 206 million monetisable daily users, and Facebook with a value of US$1 trillion and two billion daily users, dwarf the site, making this round of funding crucial for Reddit.
The platform also intends to expand internationally as most of the site is US-centric.
Things are beginning to look up for Reddit. The company surpassed US$100 million in quarterly revenue for the first time in the second quarter of this year, up 192 percent from the same period in 2020.
Keeping Users Happy
Further enticing users on its platform, Reddit is expanding its Community Points crypto reward initiative. Reddit users will be rewarded with Community Points if they post quality content on the platform. The Ethereum-based token can then be used to unlock additional features on the site, or can be swapped for other cryptocurrencies on an exchange.
Community Points are currently offered on only two of the 100,000 subreddits. Moon tokens (RCP) are available on r/CryptoCurrency and Brick tokens are available on r/FortNiteBR. Moon tokens currently trade at US$0.28 and Brick tokens at US$0.05.
Reddit also recently announced it will be using layer-2 scaling solution Arbitrum to scale Bricks and Moons. Arbitrum is just one of the many “rollups” currently being developed on Ethereum. The solution will take a large number of transactions first conducted on a different blockchain and will then roll them up into a single Ethereum block. This will reduce overall transaction fees massively.
The company has not yet announced when it will be expanding its Community Points into other subreddits.
The first priority on the product is just making Reddit awesome.
Steve Huffman
By Jana Serfontein, Crypto News Australia Guest Author
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