Reddit Inc., the renowned social media platform, is reportedly deliberating an Initial Public Offering (IPO), rekindling its previous attempts to go public, according to Bloomberg
Sources familiar with the matter revealed that Reddit is engaging in discussions with potential investors, eyeing a debut as early as the first quarter of next year.
Founded in 2005 by Steve Huffman, Aaron Swartz and Alexis Ohanian, Reddit has evolved into a significant online community.
In 2021, the company confidentially filed a draft registration with the Securities and Exchange Commission for an IPO but the plans did not come to fruition.
The interest in going public follows a substantial financing round in 2021, where Reddit raised US$410 million, led by Fidelity, valuing the company at $10 billion.
This funding was part of a Series F round, initially targeting $700 million.
Lowest IPO volume in more than a decade.
In January 2022, Reddit took further steps towards an IPO by enlisting the services of Morgan Stanley and Goldman Sachs Group Inc.
At that time, the company considered a valuation of up to $15 billion.
The decision to explore an IPO comes amid challenging market conditions.
The volatile market environment has impacted the number of companies going public in the United States, with 2022 witnessing the lowest IPO volume in more than a decade.
This scenario has led many firms, including tech startups and other entities, to postpone their public debuts, setting sights on more favourable market conditions in 2024.
Other potential debutants
Alongside Reddit, other companies, such as the Microsoft Corp.-backed Rubrik Inc. and Kim Kardashian’s Skims, are also contemplating IPOs.
Rubrik, a cloud and data security startup, and Skims, an underwear label recently valued at $4 billion, are reportedly considering IPOs in the near future.
While the plans for these IPOs are yet to be finalised, the interest in public listings signals a potential revival in the market for new offerings.
However, given the current market trends and the cautious approach of investors, the final decision and the timing of these IPOs remain uncertain.