Reddit is planning to launch its initial public offering in March, according to Reuters, which would conclude a three-year effort by the social media platform to go public amid a choppy IPO market in recent years, struggles with Reddit’s advertising revenue and a controversial decision to charge other firms for access to its data.
The company would be the first social media platform to launch an IPO since 2019.
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Key Takeaways
- Reddit will make its public filing in February before completing the IPO by the end of March, Reuters reported Thursday, citing multiple unnamed sources.
- The company will decide what IPO valuation it will seek closer to the listing, which will feature about 10% of Reddit’s overall shares, according to Reuters.
- Reddit generated $800 million in ad revenue through 2023, an over 20% increase year-over-year despite projections of more than $1 billion, according to The Information.
- A Reddit spokesperson declined to comment on the report.
Big Number
$10 billion. That’s how much Reddit was valued at following a round of funding in 2021, according to the company.
Surprising Fact
If Reddit’s IPO launch is successful, the company would become the first social media platform with a public listing since Pinterest in 2019.
Key Background
Reddit—founded by Steve Huffman and Alexis Ohanian in 2005—filed paperwork for its IPO in 2021, though that effort was shelved after Huffman determined it was “not the best market to be doing that.” Huffman said last year that Reddit, which generates most of its revenue through advertising and a monthly subscription service, has yet to be profitable.
Reddit was purchased by Condé Nast for $20 million in 2006 before it became an independent company in 2011, though Advance Publications—Condé Nast’s parent firm—remains its majority shareholder. Reddit has also drawn investments from Fidelity, Sequoia Capital and others. Reddit indicated last year it would start charging companies for access to its application programming interface, or API, a move that users warned would kill third-party apps that give millions of users alternative interfaces to browse the platform.
Reddit faced protests on the platform, including over 8,000 subreddits going dark. Huffman defended the decision to NPR, suggesting Reddit has been “subsidizing other business for free for a long time,” adding, “It’s simply expensive to run an app like Reddit.” Meanwhile, the IPO market slowed in 2022, and while it showed some signs of recovery last year, it remains unclear when the market will return to 2021 levels.
This article was first published on forbes.com and all figures are in USD.
