Reddit on Thursday revealed that its 2023 loss was $90.8 million, with revenue up about 21%, as the social media company disclosed its IPO filing ahead of its scheduled stock market debut in March. did.
The initial public offering filing comes nearly two decades after Reddit’s launch, for a platform that still lags behind the commercial success of its social media contemporaries such as Facebook and Twitter, now known as X. It will be a big test.
According to Reddit, it had an average of 73.1 million daily active users and an average of 267.5 million weekly active users in the three months ending December 31, 2023. The company announced that more than 100,000 active communities use its platform, with a cumulative total of 1 billion posts.
In a filing, Reddit reported a net loss of $90.8 million for the year ended Dec. 31, on revenue of $804 million, up from $666.7 million in the year-ago period.
Reddit was valued at $10 billion in a 2021 funding round, and it’s unclear what valuation the company will aim for with a stock sale in the coming weeks. Reuters earlier reported that the company is expected to seek to sell nearly 10% of its shares in the IPO.
According to the IPO filing, CEO Stephen Huffman will issue shares of Class B common stock that can be issued upon the achievement of vesting conditions (i.e., Reddit’s market capitalization valuation reaches $5 billion after the offering). It became clear that he owned it.
The social media company is reportedly expected to hit its valuation target from the outset.
Reuters reported on Wednesday, citing sources, that San Francisco-based Reddit has struck a deal with Alphabet Inc.’s Google to make its content available to train the search engine giant’s artificial intelligence models.
The deal is worth about $60 million annually, one of the people said.
The San Francisco-based company is poised for one of the most anticipated listings in years as the U.S. IPO market thaws as recession fears ease and hopes for a soft economic landing rise. It’s moving.
Founded in 2005 by web developer Huffman and entrepreneur Alexis Ohanian, husband of tennis champion Serena Williams, Reddit was sold by venture capital giant Andreessen Horowitz to Chinese technology giant Tencent. It has been backed by several leading investors, ranging from H.O. Holdings. Rapper Snoop Dogg is also an investor in the company.
Since its split from magazine conglomerate Condé Nast in 2011, Reddit is best known for its niche discussion groups and the ability for users to upvote or downvote content posted by other members. Now it looks like this.
The company has sought to renew its appeal among younger users in recent years, with the acquisition of TikTok competitor Dubsmash in 2020.
The company, which makes money primarily through advertising and also offers premium access for a monthly fee, is not yet profitable, Huffman said in a Reddit post last June.
Reddit had secretly filed for an IPO in late 2021, but tough economic conditions and poor performance among publicly traded technology stocks forced the company to postpone its public offering.
Morgan Stanley and Goldman Sachs have been named lead underwriters for Reddit’s IPO, along with more than a dozen other banks.
The company plans to list its stock on the New York Stock Exchange under the ticker symbol RDDT.
