Reddit Raises Cash Amid Hand-Wringing Over Nude Photos
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Reddit, known as the front page of the Internet, is raising around $50 million in funding that would value the company at around $500 million, according to a report from Re/code. The news comes as the site has once again played a central role in the newest Internet controversy — this time the leak and distribution of personal celebrity photos.
The issues do not appear to have done much to scare off investors, as noted venture capital firms Andreessen Horowitz and Sequoia Capital are reportedly involved in the round. The funding is yet another sign that the site is looking to capitalize on its massive traffic numbers.
That is easier said than done, considering the site’s complex relationship with its users, the content they post and a generally anti-commercial vibe that permeates the site.
Reddit’s system, in which a high value is placed on free speech and almost no censorship, has helped it become one of the most popular sites on the Internet and a traffic driver to sites that are able to get links on its front page. The company itself takes a hands-off approach, allowing its various sections, known as subreddits, to be overseen by dedicated users known as administrators or admins.
Conde Nast parent company Advance Publications bought Reddit in 2006 for an undisclosed sum and has let the company operate with seemingly no oversight for the past eight years. The hands-off strategy has helped the site build its traffic numbers — it logged more than 153 million pageviews in August — but also meant few efforts generate revenue.
Reddit did not respond to a request for comment.
The site has come under fire before for allowing questionable material (questionable even by Internet standards), with the issue gaining national prominence with the recent celebrity nude photo hack. The issue caused major debate among Reddit users, with some of those helping to spread the leaked photos trying to organize fundraisers, and the site’s operators, who ended up banning a subreddit that had become ground zero for the leaked pictures.
While its content problems persist, Reddit has been looking to draw attention to its more successful — and more mainstream — areas. The company creating a live thread system to cover events and breaking news as well as a mobile app for its popular Ask Me Anything series.
Marrying its almost anarchic user base with broader ambitions will be a distinct challenge for the site going forward. There is no indication as to how Reddit plans to spend the money, but more efforts to push into mobile with a focus on other popular sections, such as its Today I Learned subreddit, would make sense.