According to Bloomberg, as the social media company continued to lose money, Reddit filed for an IPO to go public.
Tens of millions of people use the community-focused message board site Reddit every day, and on Thursday afternoon, the site submitted an S-1 form to the Securities and Exchange Commission.
The 20-year-old social media startup, which is unprofitable, initially submitted a confidential IPO application in the second half of 2021 but was not successful in becoming listed. According to Bloomberg, Reddit might debut on the New York Stock Exchange as early as March.
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Reddit’s financial performance was revealed in the S-1 filing before becoming public. It has more than 100,000 active communities and 73 million daily users. While the social media company continued to lose money, losing $158.6 million in 2022 and $90.8 million in 2023, revenues increased by 21% to $804 million last year.
According to a prior report by Bloomberg, Reddit has been encouraged to aim for an IPO valuation of at least $5 billion. That is the $10 billion valuation the business received in a 2021 private funding round.
The business seems to be riding the AI bubble, according to the S-1 filing as well:
“We believe our growing platform data will be a key element in the training of leading large language models (“LLMs”) and serve as an additional monetization channel for Reddit.”
According to the filing, Sam Altman, the CEO of OpenAI, is the third-largest shareholder with an 8.7% stake.
Reddit and Google reportedly struck an agreement before the filing, according to Reuters, so that Reddit’s material could be used to train the AI models of search engines.
It’s dangerous to time an IPO during an AI bubble.
Steve Huffman, the chief executive and co-founder of Reddit, stated in the filing that the firm is going public to further its goals and strengthen itself.
Among the founding social media firms, Reddit is the last to go public, following Facebook in 2021, Twitter in 2013, and Snap in 2017.
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