Censorship fears spark criticism of Tencent funding reports: Reddit

Daniel Fowler
February 14, 2019

Hong Kong-listed technology giant Tencent Holdings Ltd (HK:) is investing $150 million in US discussion platform Reddit, according to Techcrunch that cited multiple unnamed sources.

Executives will use the new funding to bolster the capabilities and functionality of the company's platform as they seek to make it more friendly to advertisers.

It is ranked among the most visited US Web sites, and has more than 138,000 "communities" for discussions on various topics.

Some media later suggested that the investment created "a great deal of confusion", as Reddit is now blocked in China.

The funding comes from what is called a "series D funding round" and sees China's Tencent adding a considerable amount of fortune to the $300 million, infact the Chinese conglomerate threw in $150 million.

Founded in 2005, Reddit has consistently drawn an avid, young core user base, with 50% of its 330 million monthly active users between ages 18-24. The Reddit platform allows users to share links on any conceivable subject, which are then up-or down-voted, meaning the most popular content surfaces to the top and is more prominent.

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Tencent owns the all-in-one messaging app WeChat and is considered as one of the biggest gaming company in the world thanks to the ownership of the popular "League of Legends".

That's up from a $1.8 billion valuation from the company's last funding round, which brought in a $200 million investment in 2017. Search terms such as "six four" - a reference to the date of the event 4 June and "never forget" when typed into Chinese search engines have not returned any results.

Reddit's CEO, Steve Huffman, told CNBC on Monday that values the privately held company at US$3 billion.

Winnie the Pooh's image is banned in China because users have mocked the character's resemblance to China's President Xi Jinping.

For example, Reddit user ChristopherVDV posted an image of Winnie the Pooh criticizing the investment.

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