Yesterday, Reddit raised $300 million in new Series D funding from investors led by China’s Tencent. The company now values at $3 billion, in the lines of tech giants like Google and Facebook. Until now, Reddit has received $550 million in total funding. Other investors include Sequoia, Fidelity, Andreessen Horowitz, Quiet Capital, VY and Snoop Dogg.
Reddit CEO Steve Huffman, in an interview with CNBC said, “One of the things that’s been very important to us is that we can now assure advertisers that you are going to have a positive experience on Reddit and potentially even a new experience, a new way of connecting with customers.”
The investment makes sense because video game is one of the more popular categories at Reddit, and Tencent invests a lot in video game makers. Currently, Tencent owns 40 percent of “Fortnite” creator Epic Games. “They are investors in lots of video games companies,” Huffman said. “And video games are one category that’s really popular on Reddit.”
With this investment round, Huffman said he hopes to compete in online advertising with Facebook and Google. “When we are talking about competing for ad dollars, of course, we are talking about Facebook and Google, who take up the vast majority of ad spend.”
Not all is good however, as some Redditors are already protesting the funding by Tencent, considering it is Chinese, and Reddit is blocked in China, for allowing users to have a free, unedited speech. People are also speculating how China might have a chance to take over the US in the cold war.
A comment on Hacker news reads, “Tencent, a Chinese firm has meaningful ownership of American youth. 12% Snap 7.5% Spotify 40% Epic Games 100% Riot Games 100% Supercell 5% Reddit.
Hollywood has also been moving in this direction, with a lot of Chinese investment in the studios, and blockbusters adding special scenes with Chinese actors and locations.
What does it mean for America when it’s no longer the owner or creator of culture? It’s historically one of our largest (and most important) exports. I’m not sure if that claim to fame is a net positive for the world, but the changing of this guard will certainly have a local impact.”
Some other users expressed concerns, if this move may slowly start to repress anti-China content on Reddit. “The only issue I can see from ownership is if they start to censor the platform. I doubt they’ll do any overt censoring (eg. “no talking about what happened at Tiananmen Square in 1989), but I wouldn’t be surprised if they do subtle manipulation like silently deemphasizing anti-China content, or emphasizing anti-western content (eg. infighting, failure of western democracy). The latter probably would even be good for the site (in terms of engagement) as outrage drive clicks.”, reads a comment on Hacker News.