Sophie Blake
In a significant stride toward its highly anticipated U.S. stock market debut slated for March, Reddit unveiled its initial public offering (IPO) filing, disclosing a net loss of $90.8 million and a 21% revenue growth in 2023.
The IPO filing revealed that Reddit boasted an average of 73.1 million daily active users and 267.5 million weekly active users in the last quarter of 2023. Notably, the platform hosted over 100,000 active communities, contributing to a cumulative post count of 1 billion.
For the year ending December 31, 2023, Reddit reported a narrowed net loss of $90.8 million and a substantial revenue growth of $804 million, up from $666.7 million the previous year.
The journey to its IPO was not without significant funding milestones, with Reddit raising over $1 billion in private funding, including a noteworthy $410 million Series F in 2021 and a $368 million Series E in the same year. The Series F propelled Reddit’s valuation to $10 billion, building upon the $6.4 billion valuation achieved through the Series E.
In the IPO filing, Reddit also underscored the substantial benefits it anticipates and has already garnered from data licensing agreements with companies utilizing its vast repository of over 1 billion posts and over 16 billion comments to train artificial intelligence models.
“In January 2024, we entered into certain data licensing arrangements with an aggregate contract value of $203.0 million and terms ranging from two to three years. We expect a minimum of $66.4 million of revenue to be recognized during the year ending December 31, 2024 and the remaining thereafter.”
The IPO filing also shed light on CEO Steven Huffman’s stake, revealing Class B common stock issuable upon the achievement of a vesting condition – Reddit attaining a $5-billion market capitalization valuation post-offering. The company is poised to enter the market with high expectations, and the IPO is anticipated to propel Reddit toward this ambitious valuation target right from the outset. As the platform gears up for its public debut, the industry will keenly watch the unfolding dynamics and the impact of this milestone on Reddit’s future trajectory in the social media landscape.
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