Reddit’s Newfound Popularity With WallStreetBets Pays Off; Completes $250M Series E Funding
- Reddit has completed its Series E funding round, raising $250 million from investors.
- The platform's role in last month's GameStop saga has led to some interesting crypto industry activity.
- Reddit's role in the astronomical rise of GameStop's stock and other associated events has put the service in the spotlight of the financial world.
- While the fallout from the past month's events continues to play out, the web content platform has just raised some significant funding.
New Money, New Goals
Reddit announced that it had raised $250 million in a Series E funding round. The social news aggregator would use the capital to invest in several new ventures, including platform upgrades and international expansion, per an official blog post. The funding doubles the company's valuation to $6 billion. The company didn't reveal the details of its investors. Reddit said it now has 52 million daily users, representing a 44% growth from last year.
Reddit started in 2005 as a text-based messaging board but has never amassed widespread adoption of the likes of Facebook or Twitter. All that changed with Gamestop. The platform's defining moment came in January when a channel called WallStreetBets exposed a short position on GameStop from a big shot hedge fund Melvin Capital. The discovery led to a mass action from Redditors, who bought GameStop's stock en masse and caused a short squeeze that rocked Melvin Capital, and Wall Street in general.
Reddit's Eventful Year
The action has led to several other events including the decision of several brokerage services, particularly Robinhood, to temporarily suspend GameStop stock trading. That decision didn't play too well as reactions followed all the way up to the United States Capitol.
Since the GameStop saga unfolded, there have been similar occurrences in the crypto industry. DOGE has been the primary recipient of some Reddit pumping, with the dog-themed asset jumping significantly over the past few weeks.
Towards the end of January, a Twitter account posing as the WallStreetBets moderator had asked if DOGE's price has ever surpassed $1 in value. The question set off a flurry of activity concerning the asset on social media. Data from crypto analysis platform The TIE showed that the asset's Twitter volume jumped 1,787 percent over the next 24 hours, with 89,991 tweets about the asset surfacing in the same period.
Of course, Reddit investors aren't the only group who helped boost DOGE's rise. Notable TV personality Mia Khalifa announced that he had purchased the dog-themed asset, while Tesla CEO Elon Musk, a longtime DOGE believer, has used this opportunity to pump the asset on his Twitter account consistently.
A similar trend was seen with XRP, a WallStreetBets offshoot that had gotten Reddit investors revved up about the asset, leading to an 86 percent jump.