In recent weeks, Reddit Inc. was looking for investments adding about $150 million, said one of the people, who asked not to be recognized because the terms are private. A spokeswoman for Reddit said no funding had been finalized, declining to comment further.
Steve Huffman and Alexis Ohanian founded Reddit in 2005 as undergraduates at the University of Virgina. They joined Silicon Valley venture incubator Y Combinator and sold the startup to magazine publisher Conde Nast the next year. It brought a devoted audience posting links to news, images, and video, which fellow users vote on to rank their concern. It’s been the birthplace of countless online memes but has also attracted criticism for hosting racist, sexist and anonymous rants.
Despite the site’s popularity, Reddit has struggled to find a sustainable business model. Conde Nast spun the site off in 2011 while retaining a stake. Reddit spent the next few years with a rotating cast of chief executive officers, including Ellen Pao, who worked as interim CEO among a gender discrimination lawsuit against her former employer, Kleiner Perkins Caufield & Byers, which she lost. Pao’s efforts to reduce harassment were despised among some of the site’s loyalists, as was the dismissal of the well-liked moderator.
In 2014, Reddit assembled a title cast of investors from Silicon Valley and Hollywood. Joshua Kushner, Peter Thiel, and Marc Andreessen joined with Jared Leto and Snoop Dogg in a $50 million round, led by Y Combinator’s Sam Altman. The next year, the founders came back and shifted the company’s focus to a long-overdue move into mobile, means for publishers and plans for generating more revenue. With Huffman now as CEO, the San Francisco company is trying with various advertising formats and a premium subscription service.
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