Fidelity has downgraded Reddit’s valuation by 41% since the 2021 investment

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By Webdesk


Fidelity, the lead investor in Reddit’s most recent round of funding in 2021, has cut the estimated value of its equity stake in the popular social media platform by 41% since the investment.

The Fidelity Blue Chip Growth Fund’s stake in Reddit was valued at $16.6 million on April 28, according to the fund’s monthly disclosure over the weekend. That’s down 41.1% cumulatively since August 2021, when the asset manager spent $28.2 million to acquire the Reddit stock, according to disclosures made by the company in its annual and semi-annual reports.

Reddit was valued at $10 billion when the social media giant raised funds in August 2021. Fidelity — which has cut its stake in many startups, including Stripe and Reddit, in recent quarters — also cut the value of its Twitter stake, it revealed in the filing, valuing Elon Musk’s company at around $15 billion .

Reddit declined to comment.

This devaluation, part of a broader trend that has hit several growth-stage startups around the world over the past year, raises uncertainties about whether Reddit will maintain its initial intention to reportedly go public at a valuation of approximately $15 billion.

Reddit, which has raised more than $1 billion to date, counts Sequoia Capital and Andreessen Horowitz among its backers.

The current wave of valuation downgrades sheds new light on the impact of deteriorating global economic conditions on fledgling startups. Despite the reduced funding activity for startups worldwide in the past year, valuations of many larger startups have remained constant.



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