Top of the Morning
Reddit has raised $200 million in new VC funding at a $1.8 billion post-money valuation. Backers include Coatue Management, Fidelity Investments, Andreessen Horowitz, Sequoia Capital, Vy Capital, Sam Altman and Ron Conway. Reddit majority owner Advance Communications did not participate.
- Why it's the BFD: Because Reddit has just set its investor exit bar incredibly high, particularly given that it continues to focus much more on product than profit. Hard to imagine an acquirer at $2 billion-plus without a significant monetization upgrade, and Wall Street has spent months telling Snap that it cares about metrics beyond user growth and user engagement. Then again, so long as SoftBank exists...
- In the weeds: Reddit's Form D filing with the SEC suggests $182 million of stock was sold, with a total of $250 million available. It also says the financing was for both Series B and Series C stock (it's possible the Series B relates to the exercise of existing warrants, or that there is some secondary component). A Reddit spokesperson was not available this morning for comment.
- Bottom line: "[CEO Steve] Huffman's plan for the new funding includes a redesign of reddit.com — the company is literally re-writing all of its code, some of which is more than a decade old. An early version of the new design... looks similar to Facebook's News Feed or Twitter's Timeline: A never-ending feed of content broken up into "cards" with more visuals to lure people into the conversations hidden underneath." – Kurt Wagner, Recode
Venture Capital Deals
Private Equity Deals
There is no IPO news this morning, so let's peek at aftermarket performance of some of the year's VC-backed offerings. The below percentages are rounded gains/losses from IPO price, as of yesterday's market close:
- Appian: +63%
- Blue Apron: -34%
- Carvana: +30%
- Jounce Therapeutics: -19%
- MuleSoft: +28%
- Okta: +29%
- RedFin: +61%
- Snap: -20%
- Tintri: -4%
• Amazon (Nasdaq: AMZN) has acquired GameSparks, an Ireland-based "backend-as-a-service" for game developers. No financial terms were disclosed. GameSparks had been seeded by Enterprise Ireland. http://tcrn.ch/2eV6kd9
• Facebook (Nasdaq: FB) has acquired conversational AI startup Ozlo for an undisclosed amount. Ozlo raised a $14 million Series A round in May 2016 from Greylock, Amino Capital and AME Cloud Ventures. http://tcrn.ch/2tSBfth