Social news site Reddit has won $50m (£31m) in funding from venture capitalists and investors including actor Jared Leto and hip-hop star Snoop Dogg, and is preparing to give 10% of the new shares back to the website’s users.
Reddit, the so-called front page of the Internet, used its blog to confirm the funding round, which was widely reported earlier this month. As expected, prominent venture capital firms Andreessen Horowitz and Sequoia Capital took part in the round.
Yishan Wong, chief executive of Reddit, said: explained in the blog that while the details still need to be hammered out, “Led by Sam, the investors in this round have proposed to give 10 percent of their shares back to the community, in recognition of the central role the community plays in Reddit’s ongoing success.”
The site has attracted controversy in the past, most recently after it was forced to ban “The Fappening”, a community dedicated to posting the nude celebrity photos leaked over the summer – following widespread criticism accusing the company of being slow to take action.
The images were originally posted on anonymous image sharing site 4chan, but The Fappening provided a home of sorts reportedly attracting more than 250m views in days.
Reddit tried to shut the community, or subreddit, citing copyright issues rather than invasion of celebrities’ privacy.
In a comment thread to the blog, Wong further explained that Reddit is thinking about “creating a cryptocurrency and making it exchangeable (backed) by those shares of Reddit, and then distributing the currency to the community. The investors have explicitly agreed to this in their investment terms.”
He emphasized that the plan is in its earliest stages and could totally fail, “but we are going to try it because…well, because we are Reddit and we do these kinds of things.”
Wong also noted in the blog that the funding doesn’t mean that Reddit is “rich or successful.”
Just that it won’t have to operate on what’s been a “shoestring budget.” It plans to use the money to add to its current roster of 60-plus with more staff for product development. Other plans for the money include expanding the community-management team, building out moderation and community tools and working more closely with third-party developers to expand mobile offerings.
No word from Wong on what the investment means for Reddit’s bottom line. It’s long operated in the red, although that may have changed with the launch in July of its advertising business.
Founded in 2005, Reddit attracts about 133 million people to its site each month. People post stories, images, gifs and other content, and the community votes them up and down. If a link gains prominence on Reddit, a massive amount of referral traffic can follow.
Reddit was once a smaller alternative to Digg, which was at one time the top social news site. A large rebellion among Digg users about four years
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