Reddit, the widely-used social media platform, has officially filed its IPO prospectus with the Securities and Exchange Commission (SEC), signaling its intention to go public. The company plans to list on the New York Stock Exchange (NYSE) under the ticker symbol “RDDT.”
After years of anticipation, Reddit’s market debut, slated for March, is anticipated to be the year’s first major tech initial public offering and the first social media IPO since Pinterest in 2019.
In its IPO filing, Reddit revealed a robust financial performance, boasting $804 million in annual sales for 2023, marking a 20% increase from the previous year’s $666.7 million. However, the company has incurred net losses since its inception, reporting a net loss of $90.8 million for 2023, an improvement from the $158.6 million loss in the prior year.
Founded in 2005 by Alexis Ohanian and Steve Huffman, Reddit has become one of the most-visited websites in the U.S., hosting over 100,000 communities and attracting 73 million average daily active uniques (DAUq) and 267 million average weekly active uniques. Despite its popularity, Reddit has struggled to build a robust online advertising business comparable to industry giants like Facebook and Google.
Reddit aims to leverage its vast user base and community engagement to drive revenue growth. The company plans to enhance its advertising capabilities by utilizing artificial intelligence and expanding into search advertising, targeting a $750 billion opportunity by 2027. Additionally, Reddit intends to introduce new revenue channels, including data licensing and a user economy resembling platforms like Roblox and eBay.
Furthermore, Reddit’s IPO filing highlighted potential risks, including fluctuations in daily active unique figures due to various factors such as changing user behaviors and external events like the COVID-19 pandemic and cultural trends.
As Reddit prepares for its IPO, the company offers a unique opportunity for non-employed moderators, known as Redditors, to participate in the offering through its “directed share program.” With a post valuation of $10 billion and notable shareholders like Tencent and Sam Altman, Reddit’s IPO is poised to attract significant attention from investors seeking exposure to the social media landscape.
With its IPO filing, Reddit takes a significant step toward achieving its long-awaited public listing, offering investors a chance to capitalize on the platform’s immense user base and potential for future growth in the digital advertising market.