Reddit, one of the most popular online forums, has officially become a public company. This platform has operated as a private company for almost 19 years, with over 70 million daily active users. After almost two decades in the private space, the company started trading on the NYSE as RDDT effective Thursday, the 21st, after its $750 million IPO.
Reddit planned to sell 15.3 million shares in the IPO while existing stockholders intended to sell 6.7 million shares. Underwriters also had the option to buy more shares at the IPO price within 30 days, which could potentially bring in another $112.2 million. Long-time users of the platform were also given the opportunity to buy shares at the IPO price.
Reddit went public with a valuation of around $6.5 billion, down almost 35% from its 2021 value of $10 billion. However, this is not surprising since the tech industry faced challenges in 2022 due to rising interest rates and inflation. These economic challenges forced more startups to focus more on profit than growth, which affected the valuation of several small tech companies, including Reddit.
Despite the economic challenges, Reddit still managed to increase its sales to $804 million in 2023, a 20% increase compared to 2022. However, the company was still not profitable, with a net loss of $90.8 million despite the increase in revenue. One way Reddit intends to boost its revenue on its journey to profitability is through data licensing. It has already entered into data licensing agreements worth $203.0 million with several brands, including Google.
