Imgur raises $40 million from Andreessen Horowitz and Reddit
Reddit is often described as the front page of the Internet. Its community collects some of the most interesting things from around the Web and presents them in a simple website -- a website which just last month was visited by more than 114 million people viewing more than 5 billion pages.
But if Reddit is the front page of the Internet, the image-hosting site Imgur is the star reporter behind many of its stories. At the time of writing, almost one-third of the links on Reddit's default front page direct users to Imgur. The vast majority of links in popular sections like r/funny, r/pics, r/aww, and r/AdviceAnimals lead to Imgur-hosted content. (Of the top 100 links in those four sections, just 12 direct users to other sites, at least at time of writing.)
Now Reddit has invested in Imgur, which has 130 million monthly unique visitors of its own, to receive a stake in the company where so much of its content is hosted.
Imgur began as a simple tool meant to make it easier to share images on Reddit. It has since become an influential company in its own right, with more than 1.5 billion images hosted on its service viewed every single day. Imgur has grown larger than the service it was created to improve, and today it announced a $40 million funding round from Andreessen Horowitz* and Reddit, its first outside investment, to continue its astounding growth.
The New York Times reports that the deal will allow Imgur to hire more engineers, bring on more salespeople, and expand to a larger office. It will also allow Reddit to get a small taste of Imgur's growth as people start to visit Imgur.com directly instead of viewing its plethora of image macros, animated GIFs, and funny photos through other platforms. Reddit is supporting Imgur in its infancy -- maybe Imgur will return the favor when Reddit starts to approach retirement age.
Late last year, a source told Business Insider that Yahoo was in "serious talks" to buy Imgur. Today's fundraising round suggests those talks were merely rumors, or that they broke down. In any case, Imgur has set its sights on something bigger than early exit.
Investing in Imgur's continued growth gives Reddit a small stake in a nascent company. But it also gives Reddit a direct investment in the service responsible for a clear majority of the mindless links its visitors click when they're supposed to be working. Reddit isn't just investing in Imgur's future -- it's preserving its gravy train.
Reactions from around the Web
Re/code notes Imgur's behind-the-scenes status and rapid growth:
Imgur may not be a household name in social at this point. For years, the site has been largely known as an online hosting service of sorts, a repository for people to upload photos and then share out to other services like Facebook, Twitter or the wildly popular link sharing community site, Reddit.
But in just a few years, it has grown from founder Alan Schaaf’s pet college project to a Web traffic phenom, attracting upwards of 130 million unique visitors to the site on a monthly basis. The Wall Street Journal describes Imgur as the Internet's image clearing house:
After Mr. Schaaf created Imgur as a junior in college, Reddit users took to the site right away in part because it allowed easy, anonymous image uploads. The images – not just photos but memes, Photoshop creations, and GIFs – inspired comments and sharing on Imgur itself, and traffic followed. Today Imgur has more than 130 million unique visitors who rack up 40 billion image views a month.
After users upload an image – of their pet, crazy craft project, or a favorite celebrity captured in a meme – the image is often shared on Reddit, where it picks up speed before being shared out to Facebook, Twitter, and the wider world. In some sense, Imgur has become the Ellis Island of viral images: Before images become famous, they enter the free world here. The Los Angeles Times explains why Imgur was reluctant to take an outside investment:
Founder and Chief Executive Alan Schaaf said his company had resisted taking outside investment, having been profitable from its start five years ago, despite being hounded by more than a dozen venture capitalists and angel investors. Schaaf said his team decided the time was now right for the funding to speed up growth, develop new products and grow the reach of its service around the globe.
'We have been able to do everything ourselves while making money in the process,' said Schaaf, who is fond of pointing out that the only money he ever spent on Imgur was $7 to register the domain name. 'Of course, being bootstrapped forces you to move at a certain pace, oftentimes slower than what you want. So we raised money because we want to do more and do it better and we want to do it faster.' *[Disclosure: Andreessen Horowitz partners Marc Andreessen, Jeff Jordan, and Chris Dixon are personal investors in Pando]