Posted on Thursday, Dec 7th 2017
According to a survey conducted by the Reuters Institute Digital News, 13% of North American users surveyed used Google News as their weekly news aggregator. Reddit came a distant second at 7%, followed by Flipboard with a 5% usage in the region. After years of controversy, Billion Dollar Unicorn club member Reddit is now more confident of its future as it eyes an IPO before the end of the decade.
San Francisco-based Reddit calls itself the “front page of the Internet”. It was founded in 2005 by Alexis Ohanian and Steve Huffman as a platform for online communities. It hosts user-generated content and has built a following of over 234 million users. It allows users to submit links, create content, comment and vote on user-generated content, and host discussions on topics that interest them. Posts are classified under various Subredits or topics and can range from sports to gaming, pics, videos, and many more. Today, Reddit is the fourth most visited site in the US and the eighth most visited site in the world.
Within a year of being founded, Reddit was sold to Condé Nast for an undisclosed sum. At the time of the sale, analysts pegged its valuation in the range of $10-$20 million. By 2012, Advance Publications, the parent company for Condé Nast, spun off Reddit as an independent company while still retaining a majority stake.
Since inception, Reddit has been embroiled in controversy over its content. Till a few years ago, Reddit had maintained a free speech attitude toward its content. It allowed users to post whatever they wanted and relied on the readers’ ability to determine the veracity of the posts. The attitude was not well liked as Reddit soon got complaints of publishing hacked celebrity photographs and child pornography. Over the past few years, Reddit has changed its attitude towards its content. It now has a clearer policy on what can be published on the site. While it continues to host content on various topics, it has begun moderating user content. In 2015, it began by banning communities such as r/FatPeopleHate. Today, the ban extends to other content that promotes hate, violence, and animal abuse.
Reddit began generating revenues in 2009 when it launched its self-service advertising platform. For as little as $20 a day, it allowed businesses to advertise its products or services on Reddit’s bid-based pricing model and reach the audience with interests specific to the business need. It has also launched additional services such as Reddit Gold, a paid membership program for users that offers features such as the ability to turn-off ads, comment highlighting, a gold trophy for display on the homepage, to name a few. Membership fee costs $3.99 a month or $29.99 a year. While Reddit does not disclose financials, it recently commented on how its advertising revenues had grown five times over the past few years.
Reddit has raised $250.1 million in funding so far from investors including SV Angel, Bracket VC, Andreessen Horowitz, Edward Lando, Fidelity Investments, Coatue Management, Alrai Capital, Sequoia Capital, VentureSouq, Vy Capital, Y Combinator, Jared Leto, Snoop Dogg, Rick Marini, Paul Buchheit, Jessica Livingston, 500 Startups, Mariam Naficy, A. Capital Ventures, Kevin Hartz, Thrive Capital, and Philip Kaplan. Its last round of funding was held in May this year when it raised $200 million at a valuation of $1.8 billion. Reddit plans to use the latest funding to expedite internal product and business efforts, including a redesign of its homepage and venture into user-uploaded video.
Reddit has plans of listing, though not soon enough. It is eyeing an IPO in 2020. The management admits that the “time frame is pretty far out,” but believes that it is “the only responsible choice” to allow employees and investors the opportunity to exit.
More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.
This segment is a part in the series : Billion Dollar Unicorns
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Is Stitch Fix the Next Blue Apron? . Atlassian is Doing Everything Right, But is it Too Expensive? . How Does Domo's Valuation Compare with Tableau's? . Is the Duopoly Keeping AppNexus from Listing? . Why Doesn't Adyen Want to Go Public? . Will Zuora be able to Compete with Oracle? . Will DocuSign Cave in to Potential Buyers? . Should Xiaomi List at a $50B+ IPO Valuation? . What is Marketo's Roll-up Strategy? . Will Apptio Expand Internationally? . What is Anaplan's Product Strategy? . Will Apttus Take the Plunge? . How Will Nutanix Control Dell? . Does New Relic Plan to Consolidate the APM Market? . What is Coupa's Next Acquisition? . Will Medallia Help Consolidate? . How Will Ellie Mae Handle Looming Mortgage Worries? . Will Zoom Go Public or Get Acquired? . Is GoodData Ready to Go Public? . Will a Sales Strategy Change Help Cloudera? . Can Splunk Sustain its Price Point? . Can Fortinet Get to $10 Billion in Revenue? . What Other MarTech Startups Will HubSpot Acquire Next? . 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Nutanix Focuses on Software . What Should RingCentral Acquire? . Okta Delivering Decisive Growth Post IPO . Is Palantir Losing Valuation? . New Relic's Enterprise Focus Pays Off . Will Coupa Remain Independent? . Elastic Files to go Public . Atlassian Teams up with Slack to go Lean . Discord Going Strong . Is Stripe Ready to List? . BlackLine Looks at International Markets . Yitu Cashes in on China's Growing Surveillance Market . Nubank is Latest LatAm Unicorn . Revolut Looks to Expand in the US . Circle Soars With New Products . NuCom Banking on Omni-Channel . Babytree Prepares to Go Public . Talend Strengthens Ties with Microsoft . Twilio Shatters all Market Expectations . HubSpot on a Growth Trajectory . Rapid7 to Focus on Profits in Fiscal 2019 . Cloudflare Targets Enterprises . Byju's is India's First EdTech Unicorn . FireEye Targets a Profitable Year . Sonos Stock Does Not Like the Sound of its Earnings . DoorDash Enters the Club Mired in Controversy . Swiggy Enters the Club with Massive Funding . Should Oracle Buy MongoDB? . Okta Faces Tougher Competition from Cisco . Upwork Finally Goes Public . Profitable PolicyBazaar Focuses on Health, Delays IPO . Smartsheet Delivers High Growth, But No Profits . Grab Gives Uber a Ride out of Southeast Asia . Gusto Gets Fresh Round of Funding for Growth . How will Paytm Navigate Rising Competition? . DocuSign Growing Through Acquisitions . WalkMe's Enterprise Focus Pays Off . Indian B2B Marketplace Udaan Flies In . Atlassian Prepares to Take on ServiceNow . Dataminr Joins the Club . Rapid7 Acquires tCell for Growth . Palo Alto Networks Continues to Consolidate in Cyber Security . RingCentral Counting on Acquisitions and AI Upgrades . Cohesity is on the Rise . MediaMath Joins the Club . Luckin Coffee Getting Hot in China . India's OYO Rooms Checks In . Automation Anywhere Bootstrapped First and Raised Money Later . OutSystems Finally Joins the Club . Gett Driving to Profits . Tradeshift Gathers Funds To go Public . Celonis Bootstrapped First, Raised Money Later . About You Becomes the First Unicorn from Hamburg . Bitmain Lists to Go Public . Lime Rides its way into the Club . Ola at Crossroads . Bird Delivers Meteoric Growth . Will Hello TransTech Survive in the Chinese Bike Sharing Market? . Will Atlas Help Keep Competitors Away from MongoDB? . Taxify Makes it Difficult for Uber . Competition for DocuSign Heating Up . Proofpoint Steadily Building Through Acquisitions . Spotify Eyeing Podcasts . Pluralsight to Focus on Enterprise . Apptio Decides to Go Back to Being Privately Held . SurveyMonkey Should Do A Platform Strategy . Qualys Acquires 1Mby1M Company Adya . Xero Grows Through International Acquisitions . Will Ping Identity List or Be Acquired? . HubSpot Acquired 9 Smaller Start-ups