Twitter Users Are Most Valuable, Reddit Users Not As Much

Twitter Users Are Most Valuable, Reddit Users Not As Much

Reddit announced this week a $300 million funding round from Chinese tech giant Tencent, giving it a $3 billion valuation.

Reddit logo

With annual revenue of about $100 million and 330 million monthly active users, that means Reddit is generating about $0.30 per user — much less than social networks including Twitter, Facebook, Snap and Pinterest, CNBC reported.

Twitter, by contrast, has the most valuable users by average revenue. It reported 321 million active users for its latest quarterly report. With annual revenue of about $3.04 billion in 2018, that would make Twitter’s average revenue per user about $9.48.

Here’s the average revenue per user for the main social networks:

  • Twitter ARPU: $9.48
  • Facebook: $7.37
  • Pinterest: $2.80
  • Snap: $2.09
  • Reddit: $0.30

Reddit’s revenue per user may be much lower than its peers, but it provides access to the valuable younger demographic — a magnet for advertisers. Half of its Reddit’s monthly active users are between age 18 and 24.

Recently, politicians including Sen. Kamala Harris and companies like Toyota have turned to Reddit to deploy ad campaigns and try to connect with its younger demographic, PYMNTS.com reported.

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Tencent, which is 31-percent owned by South African internet/media group Naspers, invested $150 million in the Series D funding round. Other investors include Snoop Dogg, Sequoia, Fidelity and Quiet Capital.

Tencent became Snap’s biggest shareholder in 2017. Snap has since shed 40 percent of its value.

Reddit was founded by University of Virginia roommates Steve Huffman and Alexis Ohanian (husband of tennis superstar Serena Williams‘ husband) in 2005. 

Reddit is targeting ad revenue from Facebook and Google, which monopolize most of the ad spend, Huffman told CNBC. “We are competing with anybody, or anywhere people spend their free time.”