How Reddit raised its value to $10 billion

Reddit's $10 billion

After doubling its value in only six months, Reddit, the social networking site often labeled as the front page of the internet, is now worth more than $10 billion after earning $410 million in funding. 

The company announced the milestone through an in-depth interview with The New York Times, in which Reddit’s co-founder and CEO Steve Huffman disclosed how the company managed to raise its value in a short amount of time. 

Huffman told the NYT that the tech firm was approached with a financing initiative led by Fidelity Investments and were given “an offer that we couldn’t refuse.”  

After raising more than $400 million, Reddit is working on obtaining an additional $700 million in funds from new and existing investors.  

In February, the site which boasts more than a million communities known as “subreddits,” stated that it had managed to raise almost $500 million in late-stage funding, reaching a $6.5 billion valuation rate. 

Up until now, Reddit remains a privately held corporation, as it continues to work and build on polishing its business with the aim of going public in the future. “We are still planning on going public, but we don’t have a firm timeline there yet,” Huffman told The New York Times. 

Unlike other tech giants in the industry, Reddit’s main source of income comes from advertising on its site. However, it seems enough for the discussion-based platform, as the company said it scored $100 million in advertising revenue during the second quarter of 2021. 

With roughly around 52 million daily users and more than 100,000 active subreddits, Reddit is still dwarfed by other tech firms such as Facebook, who holds almost 2 billion active users, and Twitter’s 206 million monetizable online users. 

Yet, Reddit’s rise to popularity propelled the company to double its staff count by the end of 2021, aiming to reach 1,400 employees. Reddit’s current investors include high-profile venture capital firms and A-list celebrities such as, Sequoia Capital, Tencent Holdings, and rap artist Snoop Dogg. 

According to Huffman, the new round of funding will be utilized in simplifying the site for first-time users, as well as supporting the expansion of the existing communities.