Based in San Francisco RedditCo-founder of the CEO Steve Huffman and venture investor Alexis Ohanian more than 18 years ago, is finally going public on Thursday New York Stock Exchange.
Reddit's IPO is being closely watched for several reasons. The IPO is the first by a social media company since then PinterestThe company's debut in 2019. Startup investors and entrepreneurs are also hoping the IPO, which follows an ongoing drought in new technology offerings, could help revitalize the IPO market.
Reddit trades on the NYSE under the ticker symbol RDDT. The target share price is $31 to $34 with a value of up to $6.4 billion upon listing.
In an unusual move, the company is offering 74,000 of its active moderators and users the opportunity to buy shares at the price set the day before the company's IPO, giving them access to some upside potential if the stock rises over time.
Reddit's largest shareholders
Reddit was founded in the summer of 2005 as part of the first Y combinator alongside only eight other companies in the accelerator class.
It emerged in the Web 2.0 era, a period marked by the birth of user-generated content platforms, which also gave rise to Facebook (now). Meta), Twitter (now X) And Youtube.
Within 18 months of founding the media company Reddit Advance releasesOwner of magazine publisher Condé Nast and other properties, acquired the startup for $10 million.
According to securities filings, Advance remains Reddit's largest shareholder with a 30.1% stake in the company.
Other leading shareholders include investors who have led Reddit's funding since 2014:
- Chinese technology company Tencent led Reddit's $300 million Series D in 2019 and now owns 11% of the company.
- loyalty led Reddit's $420 million Series F at a $10 billion valuation. The company, which also invested in previous rounds, now owns 9.5% of Reddit.
- Entrepreneur and investor Sam Altmannow CEO of OpenAIled Reddit's $50 million Series B in 2014. His investment properties still own 8.7%, according to the documents.
- Quiet capital And Tacit capital Together they own 6.8% and invested in the Series C round for the first time.
- You capital led Reddit's Series E in 2021 with $368 million and now owns 5.1%.
Venture firms Andreessen Horowitz And Sequoia Capital Both have also invested in Reddit, but according to the documents they don't own more than 5%.
In numbers: financing, sales and growth
According to Crunchbase, Reddit has raised more than $1.3 billion from investors since its inception.
According to the filings, 2023 revenue totaled $804 million, up 21% from the previous year. At its IPO roadshow, the company indicated it expects growth about the same share in 2024. A new revenue stream signed in January includes a three-year, $60 million-a-year contract with Google to train AI models.
On Friday, the company said in filings that the U.S. Federal Trade Commission had opened an investigation into its AI data licensing business, which the company said could bring in more than $200 million in revenue over the next few years.
Reddit hosts about 100,000 forums, called subreddits, on topics ranging from niche to broad, all managed by its user community. As a result, the platform gained more mainstream attention r/wallstreetbets Subreddit and the role of this forum in the “meme stock” phenomenon characterized by the GameStop trading storm in 2021.
According to the filings, the site averaged 73 million daily active users in the fourth quarter of 2023, up 27% year-over-year, and user growth has increased in the last two quarters. Nevertheless, the company writes losses every year.
Illustration: Dom Guzman
Stay up to date on recent funding rounds, acquisitions and more with Crunchbase Daily.
Comments are closed.