Reddit Is Valued at Almost $2 Billion After its Latest Funding
Jul 31, 2017. Tom Huddleston Jr.
Online discussion forum Reddit has landed its largest funding round ever as it expands its ad business to generate more revenue from a growing user base.The 12-year-old company, which calls itself "the front page of the internet" and boasts more than 300 million monthly users, has raised an additional $200 million in venture capital funding that gives Reddit a valuation of nearly $1.8 billion.
The funding comes from a group led by Andreessen Horowitz and Sequoia Capital, along with investment firm Vy Capital, Fidelity, and individual investors such as Y Combinator president Sam Altman and SV Angel founder Ron Conway.
http://fortune.com/2017/07/31/reddit-200-million-funding/
Reddit reported $8.3 Million of revenue in 2015. It donated 10% of revenue to charity.
Reddit reported a target of $35 Million for revenue in 2016. Generally believed that Reddit missed their 2016 target and only achieved $20 Million of revenue in 2016. Reddit has been working to attract large scale advertisers to the site, to generate advertising revenue. Advertising revenue is the typical approach to monetizing a social media site (e.g. Facebook, etc).
Reddit had 48 million U.S. unique monthly visitors in May 2017, which made it the 64th most popular website in the States, according to comScore. Globally, Reddit claims to have some 300 million monthly users.
Comparing Reddit to Steemit for some high level statistics:
Monthly global users Reddit: est. 300 million Steemit: est. 1 million (EOY2017)
$$ in bank to build site Reddit: $200 million fiat Steemit: est. $108 Million SP
Number of employees Reddit: est. 70 employees Steemit: unknown. Maybe 10?
2017 ad revenue Reddit: est. $30M to $50M Steemit: est. $0
Site traffic US rank Reddit: 64 Steemit: 1300
Current valuation Reddit: est. $1.8 Billion Steemit: est. $340 Million
For STEEM to be worth $10, it has to grow by 8X.
That would value steemit at $2.4 Billion.
Compared to reddit which is currently valued at $1.8 Billion.
Can STEEM get to $10? ABSOLUTELY !!!
Is it likely that STEEM gets to $10 in 2017. Not in my opinion. Not unless BTC goes to $25K per BTC, and pulls STEEM along for the ride.
Could steemit be at 300 million global users by 2020 and generating $50M from advertising revenue by then?
Yes - that could happen. With excellent management !!
If steemit gets to 300 million global users and is generating $50M annual revenue, then STEEM at $10 would be virtually guaranteed. I suggest you want to stick around for the journey. Not many other places where you can get an 8X multiple on your investment in just three short years.
But DaveB, you are being such a pessimist again !! You need to get on the bandwagon and be a cheerleader for STEEM price going to $10 in the next two months, and then $20 and $100 immediately after that.
My opinion, that is pump and dump BS. Unrealistic Ponzi scheme hocum that isn't going to be helpful to steemit in the long term. We don't need a lot of "lets get rich quick" folks on the site, here for a good time, not for a long time.
Please enjoy the Canadian classic below. Trooper. 1977. "We're Here For A Good Time (Not A Long Time)"
http://www.azlyrics.com/lyrics/trooper/werehereforagoodtimenotalongtime.html
Please upvote or resteem if the article made you stop and think for a few seconds.
STEEM On!!
DaveB
Image from news.softpedia
Nice post! I do not think it is so easy to compare Steemit vs. Reddit. I more see Steemit as a potential hub in the digital asset universe, where intelligent people can share good content together. I guess. So, it might have a lot higher evaluation due to a bitcoin-effect. So perhaps it is comparing apples to pears so to speak. If you use the Reddit vs. Bitcoin, BTC would be pretty overinflated The number of transaction on Steemit is highest of all DA. That does not necessarily makes Steem more valuable. I just wondered about the traffic statistic for Reddit of 64. What kind of metric do you use? Reddit has a US Alexa rank of 5. Steem on!
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Thanks for comments. Insightful. I agree that the comparison is very hard. I also agree that STEEM is benefiting from some kind of positive aura for being a crypto. But if that is all STEEM has going for it, why not just put your money into BTC?
You don't have to work so hard in that case. For STEEM, you have to do a decent amount of work just to stay even, due to the 9% inflation factor. And STEEM appears to mostly just track BTC in any case.
If we want STEEM to do MORE than just keep up with and track BTC; we need more value out of STEEM and we will need steemit to take on and win against reddit in terms of inherent capabilities.
The other difference between STEEM and reddit of course, is you need to be a VC with $10's of million in order to invest in reddit at this early stage of development. You just need $10 to invest in STEEM, at this early stage of development.
That is a very significant difference.
STEEM On!!
DaveB
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I am torn apart between euphoria and lethargy. This is such a revolutionary platform and it works. I am very happy with what I made so far. But at the same time there is so much wrong with Steemit.
I feel like an extra in a daily soap opera with pyramid schemes, bot armies, intrigues, cartels, trolls and beautiful girls posting their selfies in the mall while buying their third Gucci bag with Steem money.
But even though Steemit is nearly as untransparent as Facebook (yes, I said it), the Steem blockchain isn't. And here lies the true power. Other websites like Chainbb.org or busy.org already show that you can make it differently. I still prefer Steemit because they are just not good enough, yet.
The Greatest driver though is the community itself. Despite all the flaws we see here, there is a dedicated community activating the hive mind and produce for the greater good while getting compensated at the same time. And the community comes together and creates tons of projects. Apps like @Viewly are in development building on the Steem blockchain to make a decentralized video platform with payouts like Steemit. @steemdevelopers want to pay students and teachers to take classes with Steem. This is a revolution!
So all these things are already creating so much interest and feedback that they will develop faster than Steemit itself. This will create an innovation pressure that either Steemit Inc will answer or others will come and take over to create much better things incorporating the Steem blockchain. Either way: Steem will rise.
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Lot of drama on steemit. Too much drama for a mainstream situation. Thanks for commenting.
p.s. what should I have spent the STEEM on for the girlie pictures I have been posting? I thought Gucci bags was apropos.
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How about a complete Hipster makeover with accessoires?
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But unlike Reddit, there is already a vast amount of this occuring in proportion to the other content that actually keeps bringing people back here for more, and all that creates are increasing numbers of dead accounts (or those made by bots in the first place).
Steem will continue to hover much lower in price until this issue is addressed head-on.
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Thanks for commenting. I agree. Too may folks hoping to get rich quick on steemit, which isn't a likely outcome.
To have steemit have a higher valuation than reddit, steemit needs a goal of being better than reddit in every way.
And that won't happen until someone starts working on that the advertising model is going to be that works on steemit.
There's millions for the taking, to the person who can solve the challenge of effective advertising on steemit.
I'm convincing myself this is what I should start working on.
STEEM On!!
DaveB
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Steem to 3 is possible i think in few months.
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This post received a 4.4% upvote from @randowhale thanks to @tournego! For more information, click here!
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So, Reddit is valued at 100x revenue. Yeah, that seems totally reasonable...
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FB was approx $12Billion revenue in 2014 and market cap approx $240Billion.
20X multiplier.
Reddit has 1/3 as many users, market might reasonable assume Reddit could be 1/4 as successful as FB at monetizing those users with ad revenue.
Divide FB market cap by 12, and you get $20Billion as potential market cap for Reddit, assuming it is only 1/4 as successful at monetizing with ad revenue.
With Reddit priced at $2B, you only have to assume Reddit is 1/40th as effective at monetizing ad revenue as FB.
That seems like a fairly low hurdle.
100X revenue is not an extreme valuation for social media company that is just starting to make the transition to monetizing their users.
STEEM On!!
DaveB
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Thanks for doing the numbers. Although, I think FB at 20x is probably ludicrous as well.
We'll all be able to chat about how it ended 10 years from now, after the next crash.
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There will be a next crash. That is certain.
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I've never even heard of Trooper, haha!
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Sacrilege !!!
I'm informing the border agents. Expect to be pulled aside by the mounties for a stern talking to, next time you try to enter Canada.
STEEM On!!
DaveB
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I wonder how long it will be until Steemit is a household name. It could happen. As far as advertising revenue goes, I do wonder how this will work out. Will it be like bookingteam.com making posts or do you think there will be banner and text link ads on the site? If it is the latter, I think it could be seen in a negative light by a lot of people. I am sure there could be a model for it though.
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steemit audience wont tolerate unsophisticated ads. banner ads will be flagged out of existence. even bookingteam.com isn't that well received i dont believe. i've seen lots of negative comments on that crew
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I agree. Steemit will require a new advertising model.
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We don't need a lot of "lets get rich quick" folks on the site, here for a good time, not for a long time... You said it all. Am here for a long long time. Steemit is the best. Resteemed
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Thanks for the comment and resteem
STEEM On!!
DaveB
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I don't see Steemit as a Reddit (or even facebook) alternative.
I see Steemit as an asset driven social platform with the opportunity to create and share original valuable content. It is unique compared to many other social media sites in that it encourages a monetized blog over short snippets and reshares of mindless web content.
Sure, there's plenty of unoriginal reshares of crap here, but the people who are building successful Steemit profiles are bringing something of value to the table.
What does that mean for the value of Steem?
Well advertising revenue is a possible model for higher monetization, but I don't know if many Steemit users will be receptive to that as a model. Instead, Steem is a unique valuation model. It's not Bitcoin (and more effective communication is needed to separate it from Bitcoin) and it's not Facebook. It's Steem.
Steem, like any other asset, has a value because owners of it agree that it has a value. I think Steem will grow in value because I think that the value of Steemit is in its content and community.
For this reason, I'm in it for the long run.
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Paraphrasing - if the steemdev team does a good job of implementing communities, then the value of STEEM will g up.
I agree. Thanks for commenting
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One question: While I do see the potential of steemit to catch on further, the FAQ states that steem is developed to hover at around 1 USD, hence the inflation target. So isn't 1 steem=10 USD prohibited by design, no matter the popularity?
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That is from original white paper when inflation was 100% per year. With inflation reset to 9%, all the equations change.
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Upvoted just for your name. I am in India at the moment waiting for a plant to startup and so we live the story line of Godot everyday.
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ahaha, thanks a lot! :)
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Dave has shared some wise words , I am very much hoping to see Steem rise to $10 or close enough to it . Tired of seeing it around $1.3
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Thanks for comments. Hoping to see $10. But not too soon. I need more time to get all my fiat loaded into STEEM.
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Maybe we should attract more people to join Steemit
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https://steemit.com/crypto-news/@inversor/bitcoin-price-reaches-new-all-time-record-high-of-usd3300
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Yep. Big gains in last 24 hours. Still quite a ways off from $25K per BTC.
Thanks for reading and posting
STEEM On!!
DaveB
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I kind of feel clickbaited by your title lol. Bitcoin does bring up the other coins, that is why investing in another coin besides bitcoin can be just as profitable. Besides, the fact that Steemit might one day grow more mainstream, might make it become worth insignificantly more than 10 dollars.
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Sorry on your click bait feelings. I did provide more contextual analysis on the topic of STEEM at $10 then you will find on any of the pump and dump posts that report STEEM will be $10 in 2 months.
Would you have felt better if I had provided cheerleading on why STEEM at $10 in 2 months is a totally reasonable idea?
Hopefully not. That would have been a BS post if I wrote it.
STEEM On!!
DaveB
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It's always speculation when it comes to cryptocurrencies. But since it seems very reasonable to assume they are the future of money, something like Steemit will probably get there eventually. Anyways no worries, and you can still be a cheerleader for Steem to be worth over 10 dollars in a few months. I mean, it won't happen, but it would be totally awesome though xD
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Those are excellent news for the community :D
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Thank you for supporting this claim with data and research work. Talk is cheap, but data and facts are another thing. In my opinion Steemit kicks Reddit ass as a platform, but we will see. Kind regards :)
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Good basis for economic comparison. Is there any data for the number of posts per active user? That would give you a different multiplier I believe.
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Probably yes, but I didn't find any.
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Found this a few days back. I think the sources used in this article by @knircky may be useful to you.
https://steemit.com/steemit/@knircky/the-value-of-steem-and-its-users-1-steem-user-10-facebook-users#@knircky/re-whitesj40-re-knircky-the-value-of-steem-and-its-users-1-steem-user-10-facebook-users-20170721t213118201z
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Great analysis my friend!
I agree 100%
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This post received a 3.6% upvote from @randowhale thanks to @davebrewer! For more information, click here!
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I think one major problem with steemit right now is that most of the topics are too "nerdy" and scare away normies.
In order for steemit to blow up we eventually also need popular instagram chicks like Amanda Cerny, comedians like Bill Burr or journalists publishing their own independent articles. But for that to happen UX needs to be improved (the interface is still a bit ugly since it is in beta) and the majority of posts deal with cryptocurrencies and libertarianism (not suprising, but not attractive to normal people who hang out on instagram).
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That's a great Analysis even now i hope if that happen that could be the best thing happened :D ever
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Congratulations @davebrewer! You have completed some achievement on Steemit and have been rewarded with new badge(s) :
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Thanks, great post. Yep, I'm in it for the long haul!
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Great post!
Thanks you and don't forget to Upvote & Follow :)
Steemit Is The Way To Go!
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Woo hoo.
Standard policy - no upvotes under duress
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Congratulations @davebrewer! You have completed some achievement on Steemit and have been rewarded with new badge(s) :
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I really like your point on longterm investment or let's better say longterm participation in Steemit. It will definitely rise much more in the future but why not just enjoy the whole ride slowly instead of taking every bumper on full speed...
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The last 4 months Bitcoin was outperforming steem big time. From an investor perspective other coins are more promissing I think. But steemit is a good platform for sharing good info and that is priceless!
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