Only weeks after banning The Fappening community, Reddit has announced that it raised $50 million in venture funds, including cash from a couple of celebrities. The Fappening is a reference to the leaks of many celebrities’ nude photos from their iCloud accounts.
Reddit denies connection with The Fappening
The Guardian reports that hip hop star Snoop Dogg and actor Jared Leto are among the investors who took part in Reddit’s latest fundraising round. The social news platform also said it plans to hand out 10% of its new shares to its users.
Reddit was widely criticized for being slow to ban The Fappening community, and now the timing of this fundraising round is being question. CEO Yishan Wong claims that the timing of it has nothing to do with the banning of The Fappening community.
“Fundraising cycles are much longer than nude celebrity photo cycles, and the two happened to overlap, he told VentureBeat.
He added that they told the investors who participated in the cycle about The Fappening issue and that they decided to stay in rather than pull out. Wong reportedly told them that they would handle the issue the way they always would and would not be changing their philosophy.
The Fappening community was initially started on 4chan, an anonymous photo sharing site. The community established a presence on Reddit, however, grabbing over 250 million views in just a matter of days.
Wong participates in Reddit fundraising
When asked why they decided to raise money now rather than two or three years ago, Wong said they actually did raise money at that time but that it was “quiet” and that “no one seemed to care.” He added that companies should wait until they can invest money “properly” before they should raise funds.
Wong also said that he put some of his own money into Reddit with this fundraising round. Y Combinator led the funding round. Y Combinator is the company that lunched Reddit in 2004. The social news site now has almost 115 million unique users each month.
Sequoia Capital’s Alfred Lin and Andreessen Horowitz’s Marc Andreessen also participated in the funding round. Other major participants include Peter Thiel.
How Reddit will use the money
In a blog post, Wong said they plan to use the cash to add more employees. Currently they only have about 60 workers and only operate on a “shoestring budget.” Because the company has been understaffed for so long, it has only been able to focus on features that are essential to the site.
In addition to adding workers, Reddit plans to invest in product development, improve its community and moderation tools, expand its presence on mobile devices, and improve ad offerings.