Reddit Inc bought video-sharing app Dubsmash to expand its presence in one of the hottest corners of the Internet, with users creating videos. Fifteen years old – Reddit, which said it is responsible for creating and sharing more than 1.5 million user-generated videos per day. Financial terms of a cash and stock deal were not disclosed, according to a news release.
Earlier this month, the social media company revealed for the first time that it is investing $1.2 billion in the video-sharing app company. San Francisco’s Reddit is best known for its popular “ask me something” videos featuring celebrities, politicians and various experts.
The user-created videos resemble hit apps like TikTok, which inspired Facebook Inc’s Instagram and Snapchat, along with Snap Inc., to launch similar services. Platforms that allow users to stream live videos, such as YouTube and Twitch, are also popular.
“The transition to video will be bigger than the transition to mobile,” said Reddit Chief Executive and co-founder Steve Huffman. “We’re still only at the beginning.”
With the acquisition of Dubsmash, Mr Huffman said that Reddit will create more sophisticated users for videos if it tries to develop the same on its own. Reddit already allows users to upload videos, but has limited editing options, and hopes that by creating videos in a similar way to Reddit, it will attract “more sophisticated” users.
“The cost of the video keeps going down, the technology for recording and encoding it keeps getting better and better, and on the advertising side, video ads are more effective,” he said. “They’re more visceral and engaging.”
Dubsmash, founded in 2015, was last valued at $47.5 million in 2016 and has since raised $20 million. It is estimated that its app has been downloaded almost 197 million times, and it is said that about 30% of its users log in daily to create videos.
The company, which does not generate revenue but has built a following through word of mouth, says it is dedicated to underrepresented creators and communities that are not visible on established social networks.
“Dubsmash’s focus is on showing a different side of the internet” Jonas Drüppel said. He declined to give a total figure for Dubsmash users but said that 70% were female and about a quarter of black teenagers in the US used the app. As part of the deal, DubSmash’s video creation tools will be integrated into the mobile version of the Reddit app, and it will continue to be available for iOS and Android devices, as well as Android phones and tablets.
Dubsmash will join Reddit, which has about 700 employees, Reddit has made more than $550 million since its inception and is valued at $3 billion, according to Forbes.
Investors include Facebook Inc., Google Inc. and Microsoft Corp., as well as venture capital firm Kleiner Perkins Caufield & Byers Ltd. and rapper Calvin Broadus, better known as Snoop Dogg.
