Reddit Said to Plan Hiring of Investment Bankers, Lawyers for US IPO

Reddit CEO Steve Huffman had said the company was planning to go public but had not decided on the timing.

By Reuters | Updated: 3 September 2021 14:10 IST

Reddit Said to Plan Hiring of Investment Bankers, Lawyers for US IPO

Reddit's biggest investors include Fidelity Investments, Andreessen Horowitz, Sequoia Capital

Highlights

The timing and size of the IPO were subject to market conditions
Reddit's move to hire advisers for its IPO was previously unreported
Reddit was founded in 2005 by Huffman and entrepreneur Alexis Ohanian

Reddit, the operator of online message boards that became the go-to destination for day traders chasing this year's frenzy for so-called meme stocks, is seeking to hire investment bankers and lawyers for an initial public offering (IPO) in New York, two people familiar with the matter said on Thursday.

Reddit was valued at $10 billion (roughly Rs. 73,130 crores) in a private fundraising round last month. By the time the IPO takes place early next year, Reddit hopes it will be valued at more than $15 billion (roughly Rs. 109,700), one of the sources said.

The sources cautioned that the timing and size of the IPO were subject to market conditions and asked not to be identified because the preparations are confidential. A Reddit spokesperson declined to comment.

Reddit to Raise $700 Million at Over $10 Billion Valuation

Reddit's move to hire advisers for its IPO was previously unreported. In a recent interview with the New York Times, Chief Executive Steve Huffman had said the company was planning to go public but had not decided on the timing.

Reddit was founded in 2005 by Huffman and entrepreneur Alexis Ohanian. It became known for its niche discussion groups, lagging the popularity of other major social media platforms such as Facebook and Twitter.

The San Francisco-based company saw explosive growth, however, as a result of retail investors flocking to its message boards at the start of the year for tips on trading GameStop and other meme stocks. Most Wall Street analysts deemed the meme stocks as massively overvalued.

Reddit Down: Notes Elevated Error Rates, ‘Fix Is Coming’

Reddit had roughly 52 million daily active users and over 100,000 communities, or "sub-reddits," as of October last year. Huffman has said it gained millions of new users earlier this year during the height of the trading frenzy, but more recent user figures have not yet been released.

The company makes most of its money through advertising. It reported $100 million (roughly Rs. 730 crores) in advertising revenue in the second quarter, an almost threefold jump from the same period last year.

Reddit's biggest investors include Fidelity Investments, Andreessen Horowitz, Sequoia Capital, and Tencent Holdings.

Online brokerage Robinhood Markets, whose trading app also became popular with retail investors, capitalized on the meme stock frenzy by launching an IPO in July. Robinhood itself became a meme stock on Reddit, and its shares have risen roughly 28 percent since its stock market debut.

Realme is retiring its “X” series. We discussed the new Realme GT 5G and GT Master Edition on Orbital, the Gadgets 360 podcast. Orbital is available on Apple Podcasts, Google Podcasts, Spotify, Amazon Music and wherever you get your podcasts.

Affiliate links may be automatically generated - see our ethics statement for details.

Comments

For the latest tech news and reviews, follow Gadgets 360 on X, Facebook, WhatsApp, Threads and Google News. For the latest videos on gadgets and tech, subscribe to our YouTube channel. If you want to know everything about top influencers, follow our in-house Who'sThat360 on Instagram and YouTube.