HN Explorer

Discussion: Reddit worth 12.8 million dollars?

5 points by globalrev ↗ HN
Guess many of you know this already. But is Reddit really worth that much? Their income-source is one big ad on the right that I never even thought about clicking.

http://sam.bluwiki.com/blog/2007/04/y-combinators-portfolio.html

YC Companies that have been acquired / sold:

Reddit - Valuation: acquired by CondeNast for a reported $12.8 million [3]. - Equity: An initial 8% diluted to 7%, additional 3% in the first round of funding. Justification: They were initially rejected, & YC didn't like their initial idea (hence the high 8%). A year after starting, reddit did seek additional capital (<$100,000). At that time, I'm guessing that they had a premoney valuation of $1MM, meaning their the 8% would be diluted to approximately 7%. My guess is that YC provided at least $30,000 of the this funding, for an additional 3%. - Invested capital: Initial $15,000 with an investment about a year later of ~$30,000

5 comments

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zacharye
"is Reddit really worth that much?" - Why not? A product is worth whatever you can get someone to pay for it.
marvin
What the parent asks is not about value in the Syrusian sense, but whether the aquisition price was justified - whether the acquisition will in actuality increase Condé Net's value by more than this amount.

Obviously, whoever gave a green light for the purchase must have thought so.

ConradHex
>Obviously, whoever gave a green light for the purchase must have thought so.

You could be right, or there could be other motivations. For example, maybe they thought the company had a one-in-five chance of being worth ten times that much in two years, so they figured it was worth the price.

mpc
sure why not
mattmaroon
I wouldn't put much stock in those numbers. I have no idea what Reddit sold for, but I'm told that the numbers reported varied widely and were almost all very wrong.