(Boursier.com) — The IPO of Reddit would have been four to five times oversubscribed, according to Reuters, citing people familiar with the matter. Thus, the social media platform should reach at least its indicative range during the IPO pricing in New York this Wednesday.
Recall that the group told potential investors during a presentation that it expected revenue growth of more than 20%. In 2023, revenues had already increased by just over 20%. Reddit anticipates adjusted Ebitda to break even this year, which compares to an adjusted Ebitda loss of $69.3 million in 2023. Reddit claims 73.1 million daily active users and 267.5 million users. weekly active users, on average, in the quarter ending at the end of December 2023. For the year 2023, revenues increased by 21% to $804 million, for a net loss reduced to approximately $91 million.
During a financing round in 2021, the file was valued at $10 billion. According to Bloomberg, Reddit and its shareholders are seeking to raise up to $748 million in what would be one of the biggest deals of the year. The platform and its shareholders would thus consider the sale of 22 million shares at a price ranging from $31 to $34. The targeted valuation for this IPO could be around $6.5 billion.
Sam Altman, the boss of OpenAI, is Reddit’s third shareholder with a stake of 8.7%. He invested in Reddit in 2014 – then in 2017. He was also a director on the platform’s board for seven years, until 2022, and… general manager for eight days in 2014. Among the other major investors, Steven Newhouse, co-president of Advance Magazine Publishers, owns 30.1% of the shares. The Chinese giant Tencent holds 11% of the capital. Steve Huffman, CEO and co-founder of Reddit, has a 3.3% stake.
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