Reddit's valuation has surged to roughly $6 billion following the closure of a $250 million funding round.
The discussion platform, which caters to over 50 million active daily users, said on Monday that a Series E funding round has now completed and involved both new and existing investors.
Past investment rounds date back to 2005. The last Series D round was issued in 2019 and raised $300 million. Investors include Y Combinator, Andreessen Horowitz, Sequoia Capital, SV Angel, and Tencent Holdings.
As noted by the Wall Street Journal, the Series E -- led by Vy Capital -- has doubled the company's past valuation of $3 billion two years ago.
Reddit says the $250 million cash injection will be used to make "strategic investments" in video content, advertising, and consumer products.
In terms of video content, any additional investment could be used to build upon Dubsmash. Reddit acquired the New York-based video content producer in December last year, justifying the buy of the company as a way to reach "creators and users who are under-represented in social media."
Advertising, however, is likely to be a crucial component for Reddit to become profitable long-term.
"We have continued to scale our advertising business, which is now poised to deliver performance and engagement in addition to brand awareness," Reddit says. "Advertisers have responded favorably to our efforts and the authenticity of community on Reddit, with direct advertising revenue increasing 90 percent in the last quarter, year-over-year."
In addition, the organization has its eye on expansion into international markets and intends to "double" the Reddit workforce over 2021.
"We are confident in our mission to provide community and belonging to everyone and are well-positioned for the growth we have planned," Reddit added.
Reddit became a hub for millions of retail investors in recent weeks to communicate through the WallStreetBets subreddit, leading to volatile changes in both GameStop and AMC Entertainment Holdings stock prices.
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