Reddit doubles valuation to over $7 billion after making waves with GameStop stock market frenzy

It also raised more than $300 million from investors to use towards videos, advertising, consumer products and moving into international markets.

Reddit has doubled its valuation to $US6 billion ($A7.7 billion) as the social network’s role in the recent stock market revolution thrust it into the spotlight.

San Francisco-based Reddit said Monday that it raised more than $US250 million ($A323 million) in additional funding from a group of new and existing investors led by venture-capital firm Vy Capital.

The financing increased Reddit’s value from the $US3 billion ($A3.8 billion) price tag it received in its last funding 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,” Reddit said in a blog post announcing the financing.

RELATED: Why Reddit is causing panic on Wall Street

Prices of some Wall Street stocks that had been targeted by a social media-driven campaign intended to make wealthy hedge funds suffer with Reddit used as the main forum. Picture: Olivier Douliery / AFP

Reddit had been growing even before its WallStreetBets message board upended Wall Street last month by driving up the stock prices of GameStop and other unloved companies.

The firm — whose investors include Silicon Valley’s Andreessen Horowitz and Chinese tech giant Tencent — said it now has more than 50 million daily users and its direct advertising revenue grew 90 per cent in the last quarter compared to the prior year. Reddit also said it’s getting ready to double the size of its employee workforce.

CEO Steve Huffman told The Wall Street Journal that Reddit was taking advantage of a hot market for startup funding. The company’s financing round came after the audio-chat app Clubhouse snagged a $US1 billion ($A1.3 billion) valuation after raising money last month.

“Valuations are very high right now,” Huffman told the Journal. “It never hurts to raise money when there’s an opportunity to do so and Reddit had a strong year.”

Both Huffman and Reddit co-founder Alexis Ohanian have expressed support for the retail investor uprising that unfolded on WallStreetBets, which had 8.8 million members as of Tuesday. Reddit also took out a five-second Super Bowl ad that paid tribute to the foul-mouthed forum.

This story was originally published on the New York Post and is republished here with permission