Coverage: Reddit gets investment that values company at $3 billion

Reddit Inc., the discussion forum known for its “ask me anything” online town halls with celebrities and politicians, was valued at $3 billion after a new financing round that brought in Chinese internet giant Tencent HoldingsLtd. as an investor.

Yoree Koh and Shan Li of The Wall Street Journal had the story:

Reddit raised $300 million in the latest fundraising and plans to use the cash to turn its freewheeling platform into more of an advertising powerhouse. Tencent accounts for half of the fresh financing for the San Francisco-based company, according to the person familiar with the deal terms.

The investment by Tencent comes at a time when Chinese tech companies’ deepening involvement in U.S. startups is drawing ever more scrutiny, including plans from President Trump to be announced later this week that would limit some Chinese companies from investing in U.S. tech firms.

Also, on the surface, Tencent’s investment appears to make for an odd marriage. Reddit, home to anonymous superfan communities dedicated to videogames, politics, TV shows and wildly diverse hobbies, has gained a reputation as a rowdy platform where the quirky and unpopular are welcome. It is currently banned in China, where the government tightly controls the internet.

Julia Boorstin of CNBC reported that Reddit plans to take on Google and Facebook:

Chinese giant Tencent is the newcomer in this series D round, investing $150 million and joining prior investors in the company. With this financing, the company says it plans to expand internationally and grow its ad platform, targeting the market dominated by Facebook and Google. News that Reddit was raising a round with Tencent as an investor was previously reported by TechCrunch.

Reddit CEO Steve Huffman sat down with CNBC for an interview to discuss the financing and what’s next for the company.

“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,” Huffman said. He said Reddit’s commitment to advertisers is to make that connection “free from abuse and other kinds of misbehaving.”

Since Reddit was founded in 2005, it has drawn criticism and concerns over abuse, harassment and piracy on the platform. But Huffman said the company has invested in better technology to catch abuse and better tools for its users to report it.

Tara Law of Time magazine reported that Reddit users are rallying against Chinese censorship after the investment:

Most of the backlash has been in the form of a number of posts to one of the site’s most popular groups, r/pics, which has over 20 million subscribers. Redditors have written that they feared the site, which is famously a bastion of free speech (with some exceptions) and the home of many niche communities, could end up facing censorship as is seen in China. There, the government blocks references to the bloody 1989 massacre in the Beijing square, as well as images that are more subtly subversive, such as the iconic and lovable Disney bear.

Since the deal was first reported five days ago, numerous Reddit users posted threads and memes criticizing the investment, arguing that it would cause Reddit to clamp down on freedom of expression outside of China. One post, which included the iconic image of a single man stopping a tank in Tiananmen Square, was by far the most popular post of the week and “up-voted” more than 200,000 times

Winnie the Pooh has been an outlaw in China since 2017. The Chinese government appeared to tire of Chinese social media sharing an image of the cartoon bear walking with Tigger compared to a photo of Xi Jinping and President Barack Obama.