Reddit is raising a massive funding round on investor bet it can crank up ad revenue

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It is Friday, February 8, 2019. In case you forgot.
tl;dr

Reddit gets a big upvote from investors with new round

Reddit, the news aggregation and discussion site and self-declared “Front Page of the Internet” maintains some of the most valuable web real estate.

TechCrunch reported on Tuesday that Reddit is raising a massive $150-$300 million Series D (what does this mean?).

By the end of the round, Reddit could be valued at around $3 billion.
 

r/history

Reddit was founded in 2005 by Steve Huffman and Alexis Ohanian as one of the first startups launched from the Y Combinator accelerator.

Since then, it was acquired by Condé Nast, both founders left, it was spun out as an independent company again, it raised more cash (including from Snoop Dogg), and both founders have since rejoined.

The website is the fifth most-visited in the US with around 330 million monthly active users (that’s more than Twitter).

So they’ve got VC cash, tons of engaged users, and the cutest company mascot around -- sounds like it’s all smooth sailing for Reddit, right? Well, kind of.
 

AMA, except about ad revenue

While Reddit is immensely popular, it doesn’t make big league money.

Despite having more users than Twitter, Reddit only brings in about $100 million in annual revenue -- Twitter which brings in nearly $3 billion a year.

Although reddit launched self-serve advertising in 2009, until recently the company was primarily focused on building and fostering a big, active user base without much concern for revenue.

That’s started to change in the last few years, first with promoted posts, followed by the recent rollout of cost-per-click (CPC) and cost-per-view (CPV) video ads.

The latest funding round, which nearly doubles Reddit’s valuation, is a signal from investors that they believe in Reddit’s revenue potential even if it hasn't gotten there, yet.
 
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Brendan Uyeshiro
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