Based in San Francisco Redditco-founded by the CEO Steve Huffman and enterprise investor Alexis Ohanian over 18 years ago, finally goes public on Thursday on New York Stock Exchange.
Reddit’s IPO can be closely watched for many reasons. Its public offering is the social media company’s first since then Pinterestthe company’s debut in 2019. Start-up investors and entrepreneurs also hope that the IPO, which can come after a prolonged drought in the market for latest technology offerings, will help revive the IPO market again.
Reddit can be listed on the NYSE under the symbol RDDT. The stock has a goal price of $31 to $34 and can be price as much as $6.4 billion at the time of listing.
In an unusual move, the company is offering 74,000 of its energetic moderators and users possibility of purchasing shares at a price set the day before the company goes public, to make sure it has access to profits should share prices rise over time.
Reddit’s largest shareholders
Reddit was launched in the summer of 2005 as part of the first Y Combinator accelerator class, alongside only eight other firms.
This occurred in the era of Web 2.0, a period defined by the birth of user-generated content platforms that also gave rise to Facebook (now Meta), Twitter (now X) I Youtube.
Within 18 months of Reddit’s founding, the media company Preliminary publicationsowner, among others magazine publisher Condé Nast, acquired the startup for $10 million.
Advance stays Reddit’s largest shareholder and owns 30.1% of the company, in keeping with securities filings.
Other leading shareholders include investors who have been funding on Reddit since 2014:
- Chinese technology conglomerate Tencent he led Reddit’s $300 million Series D in 2019 and currently owns 11% of the company.
- faithfulness led Reddit’s $420 million, $10 billion Series F. The company, which also invested in earlier rounds, currently owns 9.5% of Reddit.
- Entrepreneur and investor Sam Altmancurrently CEO OpenAIin 2014, he led Reddit’s $50 million Series B. His investment properties are still reported to carry 8.7%.
- A quiet capital AND Silent capital in total they owned 6.8% and invested for the first time in the series C round.
- You, capital led Reddit’s $368 million Series E in 2021 and currently holds 5.1%.
Venture firms Andreessen Horowitz AND Capital of Sequoia each have also invested in Reddit, but are reported to carry not more than 5%.
In numbers: financing, revenues and growth
Since its founding, Reddit has raised greater than $1.3 billion from investors, in keeping with Crunchbase.
The data shows that the company’s revenue in 2023 was $804 million, an increase of 21% in comparison with last 12 months. During the IPO roadshow, the company indicated that it expected growth roughly the same in 2024. The latest revenue stream struck in January includes a three-year deal with Google price $60 million a 12 months to coach artificial intelligence models.
On Friday, the company stated in its letters that US Federal Trade Commission launched an investigation into its AI data licensing activitieswhich the company estimates could generate revenues of greater than $200 million over the next few years.
Reddit hosts roughly 100,000 forums, called subreddits, dedicated to area of interest and broad topics, all managed by a community of users. The platform gained more mainstream attention as a result r/wallstreetbets subreddit and the forum’s role in the “meme resource” phenomenon it is characterised by GameStop trading surge in 2021.
Data shows that the site had an average of 73 million every day energetic users in the fourth quarter of 2023, up 27% from the previous 12 months, with user growth increasing over the past two quarters. Despite this, the company made losses every 12 months.