Tencent to Lead Investment Round in Reddit Despite China Block
On February 6, 2019, it was reported that Chinese technology company, Tencent, will lead a $300 million Series D investment round in San Francisco-based news aggregator and social content website, Reddit (the fifth most visited website in the United States). Tencent is offering $150 million, half the total of the investment round. Media reports about the capital injection have noted the irony of one of China’s leading tech. national champions investing in a site that has been repeatedly banned in China for its perceived subversive content.
Contrary to Reddit’s vocal advocacy of free speech, Tencent has ties with the Chinese Communist Party including via the company’s CEO, Pony Ma who has served as a delegate in the country’s National People’s Congress — an indication of strong ties to the government. Ma has also publicly expressed support for China’s authoritarian internet government model. Tencent has also been noted as one of the “architects” of China’s “Great Firewall.” Tencent’s primary social media platform, WeChat has been known to track and monitor domestic user data and maintain an open line of communication with the government in compliance with the 2017 National Intelligence Law.
As Beijing continues to insert itself at the upper levels of decision-making in the country’s top technology firms, the foreign investment activities of these companies, such as Tencent, have emerged as a critical concern for regulators.