Reddit Receives $50 Million Funding Boost

Promises To Share 10% With Its Users

Reddit, the community content sharing website that looks like it was designed by an impatient twelve-year-old, has just received 50 million dollars' worth of investment. What's more, the site has pledged to divide around 10% of this with its community - most likely in the form of shares. Although the details are unclear, it is believed that the wealth will be given away using a similar system to the block chain method used to create and distribute bitcoins.

Source: techcrunch.com

Reddit began its meteoric rise to prominence in 2010 after the disastrous rebranding of digg.com - its chief rival and, until then, much larger competitor. Digg's 'upgrade' was bad enough to chase the vast majority of its users right into the hands of Reddit, which has since evolved from being a B-tier tech-site to an online household name. Its 115 million monthly visitors combine to achieve 5 billion monthly page views, so it should come as no surprise that companies (and, for some reason, celebs) are looking to invest.

As detailed in an official blog post, 50 million dollars of Series B funding has been secured through various sources. The main investor is Y Combinator CEO Sam Altman, who was joined by Sequoia Capital and Andreesen Horowitz. With the site valued at around $500m, individual investors have been tempted to get involved as well, including Jared Leto and Snoop Dogg.

Why Snoop Dogg? Because, y'know, Snoop Dogg.

Lead investor Sam Altman believes that a community site should 'own itself', and sees the Bitcoin-inspired financing method as the way to achieve that: 

"The block chain came along and I thought, huh, this might the biggest evolution of corporate structure since the limited-liability corporation. So we don't know exactly how it will work yet, but all the investors are committed to allocating these shares to the community if we can find a way to make it work." 

Despite no further details, Reddit's users are understandably excited at the opportunity to get their hands on some of their favourite site's shares. Some took to Twitter to express their excitement.

MT @LHInsights: That how u do it. #reddit gets $50 million in funding & will share 10 percent of that with its users http://t.co/3Js0wIz67t
— Rohan Kamra (@rohan_kamra) October 1, 2014

However, others worry the move may backfire as the investment could force the site to mature in a way its users will see as selling out. Recently, Reddit has been under scrutiny for the way it has handled certain leaks in private data. Now the site is playing with some real money, and it could end up being forced to sacrifice its policies of free speech for heavier, harsher moderation. 

When Digg died, it was because it took its fans for granted in the quest for advertising cash. Reddit's new move suggests it's doing the exact opposite, but the site still needs to be careful with how they proceed from this point. Money won't always buy happiness.

Emile Cole

Emile is a postgrad from the University of Saint Mark and Saint John. He’s hoping to break into journalism or publishing, and won’t stop blogging until he’s managed it! Follow him @EmileAtSMF.

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