Reddit looks set to go public with IPO filing

Reddit announced on Wednesday that it had confidentially filed for an initial public offering (IPO) with US securities regulators.

Reddit’s message boards became the go-to destination for day traders during this year’s meme stock frenzy. Particularly, the WallStreetBets thread became a hub for small-time traders and Wall Street firms alike, helping drive big gains in highly shorted shares of companies such as GameStop and AMC.

The meme stock craze drove up the value of companies like Robinhood, the online trading app which had its IPO in July.

The 16-year-old company reported £75 million in advertising revenue in the second quarter of 2021, a nearly 200% increase from the previous year.

At the height of the trading frenzy in February, Reddit’s value doubled to £4.5 billion from last year. In August, it had raised an additional £307 million in funding bringing its value to £7.5 billion. 

Reddit was founded around the same time as Twitter and Facebook. Today, Twitter is valued at £26.2 billion and Facebook owner Meta Platforms is worth nearly £750 billion.

In September, Reuters had reported that the company was hoping for a more than £11 billion valuation by the time it planned for an IPO. 

The San Francisco-based company was founded in 2005 by Steve Huffman and Alexis Ohanian. 

As of January, Reddit had more than 52 million daily active users and over 100,000 communities. In comparison, Facebook had nearly 2 billion daily active users in September, while Twitter had 211 million daily active users. 

Among its investors are venture capital firms like Andreessen Horowitz, Sequoia Capital, Tencent Holding and even rap star Snoop Dogg.

Reddit is home to the internet’s most diverse message boards. In recent years, it has introduced policies to clamp down on hate groups, prostitution and other illegal activity.

As of August, the company reported around 52 million daily users on more than 100,000 active subreddits. 

The company has said earlier this year that it planned to double its staff by the end of 2021 to around 1,400 employees.

Huffman told the New York Times in August that Reddit was ‘still planning on going public’ but didn’t have a firm timeline, adding that ‘all good companies should go public when they can’.

Reddit has not disclosed the number of shares to be offered or the valuation it seeks with the IPO.

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