Reddit wants to hire more people and build more features

Oct 1, 2014 12:54 GMT  ·  By

Reddit announced that it raised $50 million (€39.7 million) in Series B funding, while also letting its community know that it will be giving back 10 percent of the equity to the members.

“We'd like to announce to that reddit has just closed a $50 million round of outside funding.  Our lead investor is Sam Altman, with participation from Alfred Lin of Sequoia Capital and Marc Andreessen of Andreessen Horowitz,” said Reddit’s CEO, Yishan Wong.

Sam Altman is the president of Y Combinator, the incubator that originally helped with the Reddit launch. The list of investors continues with Peter Thiel, but also Oscar-winning actor and musician Jared Leto and rapper Snoop Dogg.

The money will be used by the company to hire more staff for product development because over the years it has survived on a “shoestring budget” which made them efficient in a way, but only enabled them to work on essential features.

The service will expand the community management team, will work on building out better moderation and community tools and work more closely with third-party developers to expand the mobile offerings, improve the self-serve ad product, build the redditgifts marketplace, pay for the growing technical infrastructure and everything else that comes with supporting such a large community.

“An investment like this doesn't mean we're rich or successful. A couple days after we closed the financing, Sam came to our office and handed me a genuine 100 trillion dollar Zimbabwean note, as a reminder to us of the difference between money and value. Money can become worthless very quickly, value is something that is built over time through hard work. We have been entrusted with capital by patient, long-term investors who support our views on difficult issues. We believe in free speech, self-governing communities, and the power of voting. We find that this freedom yields more good than bad, and we have chosen investors based on this belief,” Wong wrote.

Reddit wants to give back to the community

As mentioned, the company will also be giving back to the community because it is users’ contribution that help the site grow. Investors have proposed to give 10 percent of their shares back to the community, in recognition to the central role people play in Reddit’s ongoing success.

There are still a lot of details to iron out, but the company hopes to have everything lined up soon enough to make sure money reaches the right people.

“Thank you to everyone who's helped to make reddit what it is today.  We have a tremendous amount of work to do, and we hope you'll continue to support us,” he CEO wrote.