Fidelity, the primary investor in Reddit's latest funding round in August 2021, has significantly reduced the estimated value of its equity stake in the popular social media platform.

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As per the monthly disclosure of Fidelity Blue Chip Growth Fund, their stake in Reddit was valued at $16.6 million on April 28. This marks a cumulative decrease of 41.1 percent since August 2021 when Fidelity acquired the Reddit shares for $28.2 million, as stated in their annual and semi-annual reports, according to a report by TechCrunch.

During the funding round in August 2021, Reddit had a valuation of $10 billion. Fidelity, which has recently marked down its stakes in various startups like Stripe and Reddit, has also reduced the value of its Twitter stake. The filing indicates a valuation of approximately $15 billion for Elon Musk's firm.

This devaluation aligns with a broader trend affecting growth-stage startups worldwide over the past year, raising uncertainties about Reddit's plan to go public at a valuation of around $15 billion. With over $1 billion raised so far, Reddit enjoys the support of backers such as Sequoia Capital and Andreessen Horowitz.

The current wave of valuation cutbacks sheds light on the impact of deteriorating global economic conditions on emerging startups. While funding activities for startups have declined globally, valuations of several larger startups have remained stable.

Additionally, in a similar move to Twitter, Reddit recently announced that it will implement charges for API access starting from June 19 this year. While this decision has garnered dissatisfaction among many developers, the developer of the popular Reddit client, Apollo, shared that the company assured him of reasonable and realistic pricing, unlike Twitter.

However, recent information shared by Apollo developer Christian Selig in a Reddit post suggests otherwise. According to Selig, Reddit informed him that they would impose a charge of $12,000 for every 50 million requests. Considering that Apollo made 7 billion requests last month, once the API pricing takes effect, the developer would be required to pay approximately $1.7 million per month or roughly $20 million annually.

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