Fidelity, the lead investor in Reddit’s latest funding round, has cut the estimated value of its equity stake in the popular social media platform by 41%, the latest high-profile writedown amid global economic weakness in public markets.
The Fidelity Blue Chip Growth Fund’s stake in Reddit was worth $16.6 million as of April 28, according to the fund’s monthly disclosure released over the weekend. That’s down 41.1% from the $28.2 million the company spent to acquire Reddit stock in Series F financing, according to disclosures the company made in its annual and semi-annual reports.
Reddit was valued at $10 billion when the social media giant raised funds in August 2021. Fidelity also reduced the value of its stake in Twitter, it revealed in the filing, valuing Elon Musk’s company at nearly $15 billion.
The company had not provided any comment as of press time Thursday.
This devaluation, part of a broader trend that has hit a variety of startups around the world in the past year, raises doubts about whether Reddit will maintain its initial intent to go public at a valuation of around $15 billion.
Reddit, which has raised over $1 billion to date, counts Sequoia Capital and Andreessen Horowitz among its backers.
The current wave of valuation downgrades is shedding new light on the impact of worsening economic conditions around the world on fledgling startups. Although funding activity for startups globally has waned over the past year, the valuations of many major startups have held steady.