Social Media Giant Reddit Inc. to go live with its IPO

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Reddit IPO

Reddit, a social media platform, raised capital through eight fundraising rounds. It generated a total of $919 million from 27 different institutional investors. Reddit Inc is expected to come up with this IPO soon. Here is everything you need to know about the issue.

About Reddit Inc

  • Reddit was founded by Steve Huffman and Alexis Ohanian in 2005 as a social media platform. 
  • It currently has over 50 million daily active users and over 100,000 communities.
  • Its WallStreetBets thread was in the news last year for starting a battle between big hedge funds and small traders.

According to Alexa Internet, Reddit ranks as the 19th-most-visited website in the world and the 7th most-visited website in the US.

About Reddit IPO

  • The company has chosen Morgan Stanley and Goldman Sachs to assist in its efforts to go public as soon as March of this year.
  • In December, it quietly filed for an IPO and is aiming for a valuation of over $15 billion.
  • It was valued at $10 billion in its last private funding round led by Fidelity Investments (August 2021).
  • The request forwarded to the US regulator, the SEC, is confidential. That is why the number of shares it will offer or its price range has not been disclosed. 

Reddit's Financials and Revenue generation

  • The company primarily makes money from advertising on its site. In the second quarter (2021), it reported it made $100 million in advertising revenue. It was three times the amount the company made in the same period in 2020.
  • They also offer premium membership to users who do not want to see ads in their feeds. The membership costs $5.99 per month or $49.99 per year. Users get an ad-free experience, 700 free monthly coins, full access to the r/lounge, and other benefits.
  • It also makes money through Reddit Coins. It is a virtual good that Reddit users can buy in bundles and gifts to other Reddit users to reward them for their contributions and good content. The Coin packs cost between $1.99 and $199.99.

Reddit competition

  • Reddit ranked fifth in the social network and online community industry from September 2021 – November 2021, beating Tiktok, Discord, and even Pinterest.
  • In terms of traffic share, Facebook, Twitter, Instagram, and Whatsapp came ahead, sweeping 38%, 12%, 11%, and 5%, respectively.
  • Reddit holds an impressive 3% of the traffic share and came in third place for visit duration at 9 minutes and 35 seconds on average, right behind Twitter (10 minutes and 32 seconds), and Facebook (10 minutes and 6 seconds). 

Global expansion

  • It has already taken action to expand its presence in the international market. 
  • In 2020, the company announced its plans to grow its UK community, and the advertising business launched a London operation. 
  • In 2021, Reddit set up its offices in Australia, Canada, and Berlin.
  • From November 2020 – November 2021, the U.S. makes up 48% of its traffic share, followed by the UK (7.6%), Canada (7.5%), Australia (4.01%), and Germany (3.19%). 

The price range and the number of shares offered have yet to be determined. We will update you on the numbers and IPO date as soon as made available.