Fidelity's Revised Assessment: Reddit Valuation Takes a 41% Dip Since 2021 Investment

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Fidelity, the prominent lead investor in Reddit's latest funding round in 2021, has significantly reduced the estimated value of its equity stake in the beloved social media platform by a staggering 41%. The latest disclosure from Fidelity Blue Chip Growth Fund reveals that its stake in Reddit, which was valued at $16.6 million as of April 28, has experienced a cumulative decline since August 2021 when the investment giant initially invested $28.2 million in Reddit shares, as per the firm's annual and semi-annual reports.

Back in August 2021, Reddit garnered a valuation of $10 billion when it attracted substantial funding. However, Fidelity, known for marking down stakes in various startups including Stripe and Reddit in recent quarters, has also devalued its stake in Twitter, estimating Elon Musk's company to be worth approximately $15 billion.

While Reddit declined to comment on this matter, the devaluation raises questions about the platform's plans to go public with a reported valuation of approximately $15 billion. With over $1 billion raised so far, Reddit boasts notable backers such as Sequoia Capital and Andreessen Horowitz.

This wave of valuation cuts reflects the broader trend impacting numerous growth-stage startups worldwide over the past year. It underscores the uncertainties arising from the deteriorating global economic conditions and their impact on fledgling companies. Despite the diminished funding activities for startups globally, valuations of several larger startups have managed to remain stable, highlighting the resilience of the industry in the face of challenging times.

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