:Reddit will raise up to US$700 million in a fundraising round led by Fidelity Management, the social media network said on Thursday, cashing in on a jump in its influence in the financial world to triple its valuation to over US$10 billion.
The company said it had already raised US$410 million from Fidelity in its second funding round since the start of the year when small-time traders gathered on its platform in their battle against Wall Street institutions.
The traders, initially focused on Reddit's WallStreetBets forum but now spread across discussion boards, have changed how Wall Street analysts operate, causing major losses for some funds and powering huge gains in the shares of companies including GameStop and AMC.
On the back of the trading frenzy, Reddit's value had already doubled to US$6 billion in February from a year ago.
The San Francisco-based company was founded in 2005 by Chief Executive Steve Huffman, entrepreneur Alexis Ohanian and the late Internet activist Aaron Swartz.
While Reddit has been a well-known internet name for years, attracting millions of experts and enthusiasts to its niche discussion groups, it has trailed behind other major social media sites in terms of its development as a business.
Although a hefty sum, the US$10 billion valuation pales in comparison to Twitter Inc's US$52 billion or the US$1 trillion value of Facebook Inc, both founded around the same time as Reddit.
As of January, Reddit had more than 52 million daily active users and over a 100,000 communities, dwarfed by Facebook's nearly 2 billion daily active users in June or Twitter's 206 million monetizable daily active users, a term for users who see the ads placed on their platforms.
Reddit topped US$100 million in advertising revenue for the first time in the second quarter, an almost threefold jump from the same period last year.
Its investors include venture capital firm Andreessen Horowitz, funds such as Sequoia Capital, Tencent Holdings and rap superstar Snoop Dogg.
(Reporting by Noor Zainab Hussain and Subrat Patnaik in Bengaluru; Editing by Arun Koyyur)