After a failed attempt in 2021, social media giant Reddit is reportedly considering going public with an initial public offering (IPO) as early as the first quarter of next year. According to a report by Bloomberg on Monday, the San Francisco-based company is holding talks with potential investors for its IPO.
Background
Reddit was co-founded in 2005 by Steve Huffman, Aaron Swartz, and Alexis Ohanian. In December 2021, the company confidentially submitted a draft registration statement with the Securities and Exchange Commission (SEC) to go public. However, those plans never materialized. Just months prior, Reddit had raised $410 million in financing led by Fidelity, valuing it at $10 billion. The company had also planned to close out its Series F funding round at $700 million.
Previous IPO Plans
In January 2022, Reddit even went as far as tapping Morgan Stanley and Goldman Sachs to work on the listing. At the time, it was considering a valuation of up to $15 billion. However, it is unclear what valuation Reddit would aim for if it decides to go public next year.
Current Status
When contacted by TechCrunch via email, a Reddit spokesperson stated that the company is in a quiet period and cannot comment on the matter. This statement suggests that Reddit may be keeping its cards close to its chest, but the rumors of an impending IPO are certainly intriguing.
What’s Next?
If Reddit does decide to go public, it would be a significant development for the social media landscape. With a valuation of up to $15 billion, it would also make it one of the most valuable tech companies to debut on the public market in recent years.
Why Now?
The reasons behind Reddit’s potential decision to go public are unclear at this point. However, it’s possible that the company is looking to capitalize on its growing user base and increasing revenue streams. With a strong brand presence and a loyal community of users, Reddit may be able to tap into the public market for additional funding.
What Does This Mean for Investors?
If Reddit does decide to go public, it could create opportunities for investors who are looking to get in on the ground floor of a potential tech IPO. However, it’s essential to remember that going public comes with its own set of risks and challenges. Investors should carefully consider their options before deciding whether or not to invest.
A Brief History of Reddit’s Funding Rounds
- Series A: $100 million (2012)
- Series B: $50 million (2014)
- Series C: $200 million (2017)
- Series D: $300 million (2020)
- Series E: $400 million (2021)
Timeline of Reddit’s IPO Plans
- December 2021: Confidentially submits a draft registration statement with the SEC to go public.
- January 2022: Taps Morgan Stanley and Goldman Sachs to work on the listing.
- Present day: Considering going public as early as the first quarter of next year.
Conclusion
The news of Reddit’s potential IPO has sent shockwaves through the tech industry. While it remains unclear what valuation the company would aim for, one thing is certain: an IPO would be a significant development for the social media landscape. With a strong brand presence and increasing revenue streams, Reddit may be well-positioned to tap into the public market for additional funding.
Sources
- Bloomberg: "Reddit Holding Talks with Potential Investors for IPO"
- TechCrunch: "Reddit Confidentially Submits Draft Registration Statement with SEC"
