Reddit, a globally popular American-based social forum, news,and discussion website, is making waves with its IPO. Ranked 18th globally in website traffic, it’s poised to follow in the foot steps of social media giant META
The attention-grabbing platform gained investor interest when traders on subreddit r/WallStreetBets triggered the historic rise of meme stocks like GameStop and AMC in early 2021.
Reddit’s main revenue source is from advertising, with 98% coming from ads in 2022 and 2023.
Reddit’s funding rounds are proving strong for the company, with several rounds boosting its value exponentially. The company has raised $1.3 billion in funding over nine rounds. The latest funding was raised on August 12, 2021, from a Series F round of $410 million.
2022 Revenue – 668 million
2023 Revenue – 804 million up 21% YOY
In a unique move, Reddit is offering its top users the opportunity to participate in the IPO early through a \"directed share program\" outlined in the filing. Users will be categorized into six tiers based on their karma score or moderator activities.
Top-tier users will have the opportunity to buy into the IPO before its public debut as a token of appreciation for their loyalty and engagement. This demonstrates Reddit’s dedication to its users as much as their commitment to the platform’s growth.
In a recent development, Google and Reddit have struck a deal allowing the search giant to utilize Reddit’s data for training its AI model on user posts and interactions. This $60 million agreement is a significant move in the realm of AI, benefiting both parties as Reddit gains access to advanced AI models to enhance its internal search and other functionalities.
As Reddit nears its IPO, OpenAI’s Chief Sam Altman is spotlighted as a crucial investor. Altman’s strategic foresight to invest in Reddit since 2014 could yield a significant financial return. Holding an impactful 9.2% of voting power, Altman’s investments, totaling at least $60 million, underscore his pivotal role and potential for considerable gains with Reddit’s public offering, solidifying his influence within the platform.
Sources: Bloomberg, crunchbase.com, New York Times, CNBC, Reuters, Business Insider
Summary
Ticker
RDDT
Price
Est. at $31-$34
Exchange
NYSE
Bookrunners
Morgan Stanley, Goldman Sachs, J.P. Morgan
Users
73.1 Million
IPO file date
22/02/2024
Valuation
$5-10 billion