What did Sen. Kamala Harris, Toyota, Charles Schwab and the new movie & ons; Jordan Peele all in common?
They all went to Reddit to implement ad campaigns and connect with consumers. The popularity of the social network with a large number of advertisers attracted new investors and increases the valuation.
The company announced on Monday that it raised $ 300 million with a $ 3 billion valuation. This is due to a valuation of $ 1.8 billion, when the company cashed $ 200 million in investments in 2017.
The Chinese giant Tencent is the newcomer in this series D round, invests $ 150 million and joins previous investors in the company. With this funding, the company says it plans to expand internationally and grow its advertising platform, targeting the market dominated by Facebook and Google. News that Reddit did a round with Tencent as an investor was previously reported by TechCrunch.
Reddit CEO Steve Huffman joined CNBC for an interview to discuss financing and what the future holds for the company.
"One of the things that is very important to us is that we can now assure advertisers that you will have a positive experience on Reddit and possibly even a new experience, a new way to connect with customers," Huffman said. He said that Reddit 's commitment to advertisers is to release that link from abuse and other forms of misbehavior & # 39 ;.
Since Reddit was founded in 2005, it has expressed criticism and concerns about abuse, bullying and piracy on the platform. But Huffman said the company has invested in better technology to report abuse and better tools for its users to report it.
The tools work, he said. Reddit has attracted advertisers with 330 million monthly active users, half of whom are between 18 and 24 years old, a valuable, hard-to-reach target group. Although the company will not announce its sales, it generated more than $ 100 million last year.
"We are reinventing the advertising activities, both on the technological side and on our ability to sell them and to create a user-friendly home for both users and brands," says Huffman. "We have made steady progress over the past year on all these fronts and we are pretty proud of where we are, and that is why we see a lot of attention from brands and investors."
Tencent's investment is remarkable. Not only is Reddit blocked in China, but the platform is also known as a bastion for free, unprocessed speech. But the investment is more logical because Tencent is an investor in a number of video game companies that hold discussions on Reddit. Tencent owns 40 percent of the Fortnite & # 39; creator Epic Games. Tencent is also a major investor in another social service that is banned in China. The company became the largest shareholder of Snap at the end of 2017 and currently owns nearly 15 percent of the public company.
"They are investors in many companies with video games," Huffman said. "And video games are a category that is very popular on Reddit."
"We are the only company on our scale that is still a private company, so we've had a lot of investor attention this past year, so we're in a good position to get something done now," Huffman said.
Now, with this additional funding, Huffman said that he hopes to take a piece of Facebook and Google's huge market share in online advertising.
"When we talk about competing for advertising dollars, we are talking about Facebook and Google, which cover the bulk of advertising spend." He said that when it comes to competition for consumers: "We compete with everyone, or wherever people spend their free time."
According to Huffman, one of the most important factors for growth is making the Reddit website, which is messy and difficult to navigate, easier for newcomers.
"When we think about internationalization, that is clearly our biggest opportunity for user growth," Huffman said. "We still want the basic principles of Reddit to work perfectly in the United States, where we understand the language and culture, and I still think we have opportunities to do better there."
Nuff is considering a year dominated by negative headlines around Facebook and Reddit's own work to secure his platform. Huffman said Reddit's growth is based on eliminating the kind of abuse that alienates users and brands.
"We have learned a lot of lessons over the years and one of the most important is that user safety and trust are extremely important," Huffman said. "We have also seen in the past year how challenging things can be if you do not get it right and how high the effort is." We believe that the deployment is increasing. "
Besides Tencent, the other investors in this round include Sequoia, Fidelity, Andreessen Horowitz, Quiet Capital, VY and Snoop Dogg.
Correction: Tacit Capital did not invest in this round. Quiet Capital did that.