American social media platform Reddit is reportedly planning to launch its initial public offering in March. Reuters reported earlier today that the company plans to make a public filing in late February, followed by a roadshow in early March, and aim to complete its IPO by the end of March.
This event is notable as it represents the first major social media company to go public since Pinterest’s debut in 2019. Reddit now plans to sell about 10% of its shares in the IPO and will determine the final IPO valuation closer to the listing date considering market conditions.
Known for its unique community-driven content and niche discussion groups, Reddit as last valued at approximately $10 billion in a 2021 funding round where it raised $410 million in a Series F funding led by Fidelity. Following this, the San Francisco-based company confidentially filed for an initial public offering with the U.S. securities regulator – the Securities and Exchange Commission – in 2021. However, those plans did not materialise.
Founded in 2005 by Steve Huffman and Alexis Ohanian, Reddit is a social media platform and online community where users can share, discuss, and vote on content. The latest news of Reddit going public in March 2024 comes amidst a competitive landscape, with the company struggling for advertising revenue in a market dominated by platforms like TikTok and Facebook.
The company’s revenue model, primarily based on advertising and premium subscriptions, reportedly generated over $800 million in ad revenue in 2023. This is more than 20% increase from the previous year. However, investments in platform enhancement and lower engagement with ads compared to other social media sites have contributed to its losses.
Reportedly Reddit’s IPO plans, while concrete, may still face delays. This cautious approach is in line with the company’s strategy of waiting to approach profitability and navigating the fluctuating IPO market conditions over the past few years.