Online discussion forum Reddit has landed its largest funding round ever as it expands its ad business to generate more revenue from a growing user base.
The 12-year-old company, which calls itself “the front page of the internet” and boasts more than 300 million monthly users, has raised an additional $200 million in venture capital funding that gives Reddit a valuation of nearly $1.8 billion. A Reddit spokesperson confirmed the details of the funding round to Coins2Day after t ech news site Recode first reported the news on Monday afternoon.
The funding comes from a group led by Andreessen Horowitz and Sequoia Capital, along with investment firm Vy Capital, Fidelity, and individual investors such as Y Combinator president Sam Altman and SV Angel founder Ron Conway. The new funding includes a new investment from Advance Publications—the parent company of former Reddit-owner Condé Nast, which still owns a majority stake in after spinning off the site in 2011.
Reddit had previously raised roughly $50 million in 2014, then valuing the company at about $500 million. Last month, Bloomberg reported that Reddit was seeking roughly $150 million in additional funding. However, co-founder Alexis Ohanian also told the Wall Street Journal that the company was wary of becoming overly dependent on fundraising and that a “grow your own destiny” strategy would be more prudent.
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Reddit has been working to translate its strong user growth into more ad revenue partly by introducing video ads on the site. It is also offering advertisers more options for where they can place their ads, from sponsored posts to mobile-specific ads.
Meanwhile, Reddit CEO Huffman told Recode that the company plans to spend some of the new funding on redesigning its main website, including rewriting all of the site’s decade-old code. The goal is to create something similar to Facebook’s News Feed and Twitter’s timelines, with content appearing in a continuous feed with more visuals meant to draw in users. “We want Reddit to be more visually appealing,” Huffman said in the interview. The company may want to be careful on that front, especially considering the fact that Reddit’s users have been knownto revolt against any major changes.