(Reuters) – Reddit Inc, which has been at the center of a recent social media-driven retail frenzy, said on Monday that it raised more than $ 250 million in a new round of financing that doubled its valuation for US $ 6 billion.
The social media company was valued at $ 3 billion after a financing round in February 2019.
“We decided that now was the right opportunity to make strategic investments in Reddit, including video, advertising, consumer products and expanding into international markets,” the company said in a blog. (bit.ly/3p37uC3)
Reddit CEO Steve Huffman told the Wall Street Journal that it is a good market for raising funds. (on.wsj.com/2N5U62)
“The ratings are very high now. It never hurts to raise money when there is an opportunity to do so and Reddit has had a strong year, ”said Huffman, according to the WSJ report.
Reddit, which has more than 50 million daily active users, said on the blog that advertising revenue increased 90% in the last quarter compared to the previous year.
Video game retailer GameStop Corp and other companies, including movie operator AMC Entertainment Holdings Inc, have seen huge swings in their shares in the past two weeks as amateur investors on forums like Reddit’s WallStreetBets have acted together to bid against which some American funds had bet.
The rally attracted the attention of regulators, although U.S. Treasury Secretary Janet Yellen said on Sunday that it was too early to say whether new policies or regulations are needed to deal with volatility.
Reporting by Rama Venkat and Kanishka Singh in Bengaluru; Editing by Devika Syamnath and Shounak Dasgupta