Reddit will use its new funding to further its international presence and explore more content types, co-founder and CEO Steve Huffman told CNBC on Friday.
“First order of business is make Reddit awesome. Make Reddit faster, more relevant, help it work for more people,” Huffman said about the company’s plans on “TechCheck.” ”And then we look to the future, so internationalization is a big effort of ours. Video will be another big effort of ours, so just same strategy. Just keep moving ahead.”
Reddit announced on Thursday it will raise up to $700 million in a Series F fundraising round led by Fidelity Management, giving it a valuation of over $10 billion, more than triple what it was worth in February 2019. The company said it had already raised $410 million from Fidelity in its second funding round since the start of the year when small-time traders gathered on its platform in their battle against Wall Street institutions.
In February, shortly after the Reddit-fueled GameStop saga, the social media site completed a capital raise that doubled its valuation to $6 billion. Reddit also reached $100 million in advertising revenue for the first time in the second quarter of 2021, which is a 192% increase compared with the same period last year.
Reddit, founded in 2005, had 52 million daily active users and 100,000 subreddit communities as of January, according to Reuters. The site’s infamous WallStreetBets forum now has more than 10.7 million participants.
“If we go back in the past, 15 years ago Reddit was just links, and then we added text and images and third-party video and our own video,” Huffman said. “Every time we add a new content type, our users are creative in new ways and usually in ways that we can’t predict. … We’re looking forward here to another big evolution of Reddit. I think there’s a version of Reddit that’s even better watched than it is read. Of course, text isn’t going anywhere either.”
Reddit still falls short of other major social media sites in its growth. Its latest valuation appears small next to Twitter’s $51.7 billion valuation and 206 million monetizable daily active users, as of the second quarter, and Facebook’s $1 trillion dollar valuation, as of Friday’s market close, and 1.9 billion daily active users in June. Both of those tech giants have been around for roughly as long as Reddit has.
Reddit’s unique ability to host users who pioneer a new content type, like the meme, or drive up the popularity of certain kinds of content is what makes the company stand out, Huffman said.
“I think that’s what makes Reddit really interesting is that our users do things that we or nobody else would ever actually predict, and I think that’s the fun of it,” he said.
Alexis Ohanian, Reddit’s co-founder and former executive chair, similarly told CNBC earlier on Friday the company’s online community is one of its greatest strengths. “I think every business is really now taking notice to the power of actually having an incentivized and motivated audience that isn’t just sort of being used or mined for their information but actually contributing to something much bigger than themselves,” he said.
Ohanian, who is now a venture capitalist, said Reddit can be a part of technology’s role in building trust with communities to combat misinformation.
“Traditional institutions have both lost a lot of confidence in the eyes of people, as well as just sort of gotten outmatched when it comes to sort of quantity and even sometimes quality of content,” Ohanian said on “Squawk Box.”
The site’s meme stock trading activity has previously led to conflicts with the Wall Street establishment and even pushed the U.S. Securities and Exchange Commission to more closely monitor the volatility of some stocks’ trading prices.
Huffman said that Reddit has had conversations with the SEC and that the company has long monitored manipulation tactics, whether it’s in the form of “users, a clever marketing team or something bigger and more nefarious.” He said that people who try to manipulate Reddit “tend to stand out” against the site’s regular user community.
“Our responsibility at Reddit is for our users to be able to create community, to find belonging, to come together around their interests and passions,” Huffman said. “Whether that’s stock trading and Wall Street Bets or more longer-term trading and … investing, you know, both are celebrated and both are welcomed at Reddit.”
— Reuters contributed to this story.