About two years after confidentially filing for an initial public offering, Reddit Inc. plans to go public in March, according to a Reuters report today.
The report, citing unnamed sources, said Reddit plans to make the announcement publicly in late February, followed by a roadshow in March and listing by the end of March. Reddit is said to want to sell around 10% of the shares as part of the IPO, but a valuation is still pending. The report also adds that Reddit's IPO plans could be pushed back, as has happened before.
Founded in 2005 by then-University of Virginia students Steve Huffman (pictured right) and Alexis Ohanian (left), Reddit describes itself as the “front page of the Internet.” The site, a mix of social networking and online forums, was acquired by Conde Nast in 2006 before being spun off as a separate company in 2011 at a valuation of $200 million.
How exactly Reddit is rated today is open to speculation. At the time of its confidential IPO filing in 2021, Reddit's valuation was estimated to be at least $10 billion based on a $700 million fundraising round in August 2021.
In June last year, it was reported that Fidelity, which led the round in 2021, had reduced the estimated value of its investment to $16.6 million, 41.1% less than the $28.2 million, which it had spent to acquire Reddit shares. It was also noted that at the time, Reddit was still considering an IPO with a valuation of around $15 billion.
It is difficult to say what the number will be in March. Perhaps even more difficult when calculating a valuation is that there is little comparison to Reddit's IPO. The last social networking company to go public — and some may dispute calling Reddit that — was Pinterest Inc. in 2019, but a lot has happened in the world in the following four years.
However, with the IPO, Reddit is following in the footsteps of others and going public after never being profitable.
According to Reuters, the company is expected to have generated more than $800 million in advertising revenue in 2023, up 20% from the previous year but not enough to break even. Reddit has previously claimed that its losses were due to the company's investment in the platform and that its users engaged less with advertising on the site than on other social media sites.
Photo: Reddit
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