Tencent backs Reddit in $300 mln fundraising round
Chinese tech giant Tencent has invested 150 million U.S. dollars in American online forum site Reddit, with the social news aggregator confirming Monday that it attracted 300 million U.S. dollars in a fundraising round that values the company at more than three billion U.S. dollars.
Reddit, which calls itself "the front page of the Internet," has estimated 330 million monthly users and was the third-most-visited website in the U.S. as of February 2018, according to Alexa Internet.
Founded in 2005 by two University of Virginia students, Reddit has continued to attract a loyal user base despite its relatively simple format, where users are invited to discuss just about any topic on more than 150,000 "sub-Reddit" forums.
The company said in December that it had 1.4 billion video views per month, a 40-percent increase within just two months.
A cash injection in Reddit from Tencent highlights a shift in the Chinese company's investment strategy, after previous years saw it spend heavily on game developers like Supercell and Epic.
While Reddit is not currently available in China, Tencent will have noticed the emergence of Bytedance – the company behind news aggregator Toutiao and short video platform Tik Tok – as a new rival on China's tech scene.
Bytedance is, according to some estimates, worth as much as 100 billion U.S. dollars, thanks to the huge popularity of its platforms in China and elsewhere.
Reddit is not the first U.S. social media platform to court investment from Tencent. In November 2017, the Hong Kong-listed company purchased a 10-percent stake worth two billion U.S. dollars in Snap, the parent company of Snapchat.