Reddit Now Valued at $10b with New Funding Round

Reddit has reported a new funding round, which will increase its valuation to $10 billion, and provide it with the capital that it needs as it looks forward to the next stage of its overall development.

As explained by Reddit:

“We’re making strategic investments to grow Reddit and our business, including expanding internationally, innovating new ways to foster community, and bolstering our advertising offerings and capabilities. We’ve been making a great deal of progress on all fronts – from hiring our first chief financial officer and building out a comprehensive finance function, to expanding internationally in the UKCanadaAustralia, and more countries to come.”

The valuation underlines the rising potential of the platform, though it still remains significantly behind other social apps in this respect. Twitter, for example, has a market cap of $52 billion, while Snapchat is on $118b. As such, the valuation likely reflects the current state of the platform in the broader digital ads space – but as Reddit notes, it is working to boost its potential over time.

And those efforts are working. Reddit also notes that, this year, it registered its first $100 million advertising revenue quarter, which represents a 192% increase compared to the same period in 2020.

“We’re also investing in our products, and diversifying the Reddit experience to include new ways for communities to connect through video and audio.”

Indeed, Reddit sought to tap into the Clubhouse-led audio social trend earlier this year with the launch of ‘Reddit Talk’, to facilitate audio rooms within subreddits, while it’s also still experimenting with live-streaming via its RPAN initiative. Reddit also added a text-based community chat option to facilitate more engagement in April last year.

But the main focus for the app, from a business perspective, has been cleaning up its platform, in an effort to shed previous perceptions about its facilitation of more controversial elements.

The biggest move on this front was the revision of its rules around hate speech last June, which resulted in the removal of thousands of subreddits. That, at least in part, came as part of the broader discussion of the Black Lives Matter movement, and the role that social platforms have played in amplifying hate speech.

The flow on benefit of this is that it’s enabled Reddit to better address some of these more problematic communities, which has since facilitated increased advertiser trust, while Reddit has also been working to provide more specific targeting and exclusion tools to address ad placement concerns.  

Clearly, based on Reddit’s rising ad revenue intake, those efforts are working, even if they do also seem to have impacted usage to some degree. Back in December, the platform reported that it now has 52 million daily active users, which was a shift in its previous reporting, which saw it noting monthly active user stats.

In December 2019, before it enacted its subreddit cull, the platform reported 422 million monthly actives. And while the two figures are not directly comparable, it does seem that there’s been at least some decline in total audience reach – though Reddit did also report a 44% YoY increase in in-app engagement.

So even if fewer people are using it. overall, the ones that are active are increasingly so, and the platform’s broader clean-up efforts do seem to be helping to steer it in the right direction, and attract advertiser interest. And if Reddit can grow that DAU figure again in 2021, that will help to attract more ad dollars, and further its business goals.

Should Reddit be on your radar as a potential ad placement option? It’s definitely worth a look.

There’s a subreddit for virtually every interest, with highly engaged communities around each. And they might just provide a new pathway to your target audience – or at the least, give you another avenue for research and understanding key trends.

Source:, originally published on 2021-08-12 19:22:29