Popular social media platform Reddit on Thursday officially announced its plans for an Initial Public Offering (IPO) on the New York Stock Exchange. Under the ticker symbol “RDDT”, the company aims to make its stock market debut as early as March.
“We are going public to advance our mission and become a stronger company,” Reddit chief Steve Huffman said. “I have never been more excited about Reddit’s future than I am right now. We have many opportunities to grow both the platform and the business, the latter through advertising, monetizing commerce on the platform, and licensing data.”
In addition to perhaps becoming the first major social media platform to go public since Pinterest in 2019, the move is an important first for the company as it positions Reddit to become the largest tech IPO of 2024 (to date). Reddit’s journey to the IPO marks a significant milestone nearly two decades after its founding. The company’s valuation was pegged at $10 billion during a 2021 funding round, although the exact valuation target for the IPO remains under wraps.
In terms of financials, Reddit reported a net loss of $90.8 million for the fiscal year that ended December 31, 2023, according to its IPO filing. Despite this, the company showcased a 21% revenue growth, climbing to $804 million in 2023 up from $666.7 million in the previous year.
The San Francisco-headquartered company, which has been a cornerstone of internet culture since its inception in 2005, boasts an impressive 73.1 million daily active users and 267.5 million weekly active users. The platform’s appeal lies in its unique structure, offering over 100,000 active communities that span a wide array of interests, discussions, and content sharing. The company said to allot a “significant” portion of its shares to its retail investors and platform users; however, the precise number is not stated in the filing.
Reddit’s IPO will be closely watched and while it enjoys a loyal user base, the company faces stiff competition from established social media giants like Meta and X. Additionally, the company needs to address challenges like content moderation, online harassment, and diversifying its revenue streams.
Earlier this week, Reddit reportedly inked a lucrative content licensing deal with tech giant Google to train the search engine giant’s artificial intelligence models. The annual deal is reportedly worth $60 million and adds to Reddit’s source of generating revenue.
