By
Tolu Ajiboye
March 22nd, 2024
Reddit was recently valued at $10 billion after closing a private fundraising round.
Reddit Inc, an American social media platform focused on news aggregation and web content rating, is reportedly preparing for a $15 billion-plus initial public offering (IPO) early next year. According to news outlet Reuters, people familiar with the matter have confirmed that the company is seeking to hire investment bankers and lawyers to assist in the IPO.
Reddit was recently valued at $10 billion after closing a private fundraising round. In a recent interview with NYT, Steve Huffman, Reddit Chief Executive Officer said that the company is preparing for an IPO. However, he did not disclose the timing to investors.
The company is seeking to hire market experts to help make the IPO a success. However, the informants cautioned that the timing and the size of the initial public offering are subject to market conditions. Moreover, the number of shares sold and the set price will depend on the market demand.
Founded back in 2005 by Huffman, Alexis Ohanian, and the late Aaron Swartz, Reddit has grown to a one-stop socializing platform. However, the platform faces fierce competition from the likes of Twitter and Facebook as they provide almost similar services.
However, the platform has over the years gained the trust of millions of users due to its credibility. According to the company, it has over 52 million daily active users and over 100,000 communities, or ‘subreddits,’ as of October last year. The number is likely to be higher this year after the meme stock frenzy that began earlier this year.
Some of the meme stocks included GameStop Inc (NYSE: GME) that was vouched for by Redditor WallStreetBets.
Reddit and Its Performance Ahead of IPO
As the company prepares to go public after years of being a highly valuable private company, investors would be interested in its earnings results and projections. Notably, Reddit makes most of its revenue from advertising, which accounted for $100 million in revenue during the second quarter.
Worth noting, the figure was three times higher than what the company reported during the second quarter of 2020. An indication the company has seen a huge growth in users and advertisers.
Some of the notable private investors who have invested in Reddit include Fidelity Investments, Andreessen Horowitz, Sequoia Capital, and Tencent Holdings.
In a bid to remain competitive, the company announced a partnership with the Ethereum ecosystem to build scaling tools on the blockchain network. Additionally, the platform previously introduced community tokens based on Ethereum’s ERC20 system.
Earlier this year, the company hired Drew Vollero, Snapchat’s former executive, as its chief financial officer.