Reddit Reportedly Planning IPO Launch in March

Social media giant Reddit is set to launch its initial public offering (IPO) in March, a move it has been planning for over three years, Reuters is reporting.

Reddit’s IPO will mark the first major social media IPO since 2019, joining the ranks of competitors like TikTok and Facebook in the race for advertising dollars.

Having confidentially filed for IPO in December 2021, the company intends to make its public filing in late February, initiate its roadshow in early March, and complete the IPO by month-end, according to unnamed sources.

Valued at approximately $10 billion in a 2021 funding round, Reddit plans to sell about 10% of its shares during the IPO, though the final valuation remains undecided.

However, insiders caution that Reddit’s IPO timeline may face delays, a possibility experienced in the past. The company declined to comment on the speculation.

Last year, Reddit introduced charges for access to its API, causing discontent among users relying on third-party apps. The move was aimed at monetizing its API used by tech companies for training large-language models in artificial intelligence.

Founded in 2005, Reddit, known for its unique discussion groups and user voting system, generates revenue primarily through advertising and offers premium access for a monthly fee.

Despite its valuation, the company has yet to turn a profit, citing investments in the platform and lower user engagement with advertising. The decision to proceed with the IPO was delayed until closer to profitability, influenced by market volatility that disrupted IPO plans in the past two years.

Reddit anticipates advertising revenue to exceed $800 million in 2023, reflecting a 20% increase from the previous year.