General info on Reddit

About Reddit

Reddit is an American-based user-generated social forum, news, and discussion website popular worldwide. Ranked as the 18th most visited website globally, this IPO is making waves, potentially laying the groundwork for RDDT to follow in the footsteps of social media giant META.

Reddit grabbed investors' attention after traders on the subreddit r/WallStreetBets led to the historical rise of meme stocks like GameStop and AMC in early 2021. 

Reddit IPO Figures & Valuation 

Reddit’s main revenue source is from advertising, with 98% coming from ads in 2022 and 2023.  

Reddit's funding rounds are proving strong for the company, with several rounds boosting its value exponentially. The company has raised $1.3 billion in funding over nine rounds. The latest funding was raised on August 12, 2021, from a Series F round of $410 million.

• 2022 Revenue – 668 million
• 2023 Revenue – 804 million up 21% YOY

According to inside sources, CNBC stated Reddit plans to price its IPO between $31-$34 per share with a valuation of up to $6.5 billion. Although there is not an exact valuation yet, previous estimates value the social media platform at $10 billion.

Reddit has hired Morgan Stanley, J.P. Morgan, and Goldman Sachs to guide the company through the process as its bookrunners. 

First Chance to Moderators

In an unconventional twist, Reddit is giving its top users the chance to get in on this IPO early     through a, “directed share program” as stated in the filing. Reddit users will be sorted into a six-    tier system based on their ‘karma’ score or moderator actions.

Top-tier users will get a chance to purchase the IPO ahead of its debut as gratitude for being     loyal and an active user. This shows that Reddit is committed to its users as much as they are to this growing social media platform.

Google Strikes a Deal with Reddit to Improve AI

Most recently, Google and Reddit came to an agreement where search giant Google uses     Reddit’s data to train its AI model on human posts and interactions. This $60 million deal comes     in the heat of AI and helps both companies, as Reddit gains access to AI models to improve its     internal search and other features. 

Driver Behind Open AI, Sam Altman has Significant Stake in Reddit

As Reddit nears its IPO, OpenAI's Chief Sam Altman is spotlighted as a crucial investor. Altman's strategic foresight to invest in Reddit since 2014 could yield a significant financial return.  Holding an impactful 9.2% of voting power, Altman's investments, totaling at least $60 million, underscore his pivotal role and potential for considerable gains with Reddit's public offering, solidifying his influence within the platform. 

More on Reddit 

• Reddit has an average of 73.1 million daily active users.
• As of October 2023, Reddit is the 18th most-visited website in the world.
• Investors are eager as this is the first social media IPO in years, following Pinterest’s debut in 2019. 
• Although sales are flat, Reddit is embracing the AI era, capitalizing with licensing deals to use their data and improve AI models (Google as of latest).
• Sam Altman really believes in Reddit since 2014 and is a major investor with over 9% voting rights. 

Sources: Bloomberg, crunchbase.com, New York Times, CNBC, Reuters, Business Insider