SAN FRANCISCO — Fresh off a winning Super Bowl ad and a role at the center of a recent stock market frenzy, Reddit announced on Monday that it had raised $250 million in new funding, valuing the social news start-up at $6 billion as it aims to turbocharge user growth and double its work force.
The investment is a shot in the arm for Reddit, which since 2003 has focused on building digital communities around topic-based message boards. The latest funding, led by Vy Capital with participation from previous investors like Andreessen Horowitz, Sequoia Capital and Tencent Holdings, doubles Reddit’s valuation from its last financing in 2019.
Reddit, which is based in San Francisco, said the funding built on the success of its burgeoning advertising business, as brands and marketers are attracted to the site’s powerful and active community members.
“We have come a long way in recent years to focus more on the needs of the hundreds of thousands of communities that make up Reddit,” the company said in a blog post. “We have dedicated ourselves to Reddit because we believe in the power of communities that provide a sense of belonging and connection as real as the ones we make offline.”
Reddit has been highly visible in recent days. Last month, shares of the video-game retailer GameStop soared as users of Reddit’s WallStreetBets forum, which is known as a “subreddit,” egged one another on to buy the stock, partly to entrap hedge funds that had bet the stock would fall.
That sent GameStop’s stock on an extraordinary and volatile ride. After a flurry of media attention, the WallStreetBets forum ballooned to more than seven million members. Multiple book and film option rights have been shopped over the saga, with the prospect of fame and money embroiling the forum’s moderators in bitter disputes.
Reddit was also widely praised for a five-second commercial that aired during the Super Bowl on Sunday, which became one of the most talked-about ads on a day that was crowded with talked-about ads. Reddit’s spot, which required viewers to pause their television screens to read it, proclaimed, “Wow, this actually worked.” Viewers scrambled to grab screenshots of one of the shortest-ever Super Bowl ads to post to social media.
Reddit has had its share of controversy over the years. The company has long been criticized for its laissez faire approach to content moderation, which allowed racist, sexist and troll-filled communities to flourish. At one point, Reddit refused to remove subforums dedicated to racist commentary, citing the need for free and unfettered speech.
In recent years, the company has changed its tune on content moderation. Since Steve Huffman, a Reddit co-founder, returned as chief executive in 2015, the start-up has overhauled and fine-tuned its content policies. Reddit has barred communities of Nazis and other far-right contingents. In June, it banned The_Donald, a subforum dedicated to supporters of President Donald J. Trump, which the company said had repeatedly broken its rules against harassment and other behavior.
Reddit said it planned to use the new injection of capital to expand its community of more than 50 million daily active users. That includes courting more influencers and content creators, a move it made when it bought the short-form video platform Dubsmash, a rival to TikTok, in December. Reddit, which has more than 700 workers, also said it would double that number this year.