Reddit may launch IPO in March, nearly 3 years since its initial filing

Reddit is planning to launch its initial public offering (IPO) in March of this year after nearly three years since its initial filing in December 2021, according to a report by Reuters. The social media platform is planning to make the next steps in the following months and complete the process by the end of February, commence its roadshow in early March, and aims to conclude the IPO by the end of March.

The IPO valuation for the company will be determined closer to the listing date taking into account market conditions. Reddit is looking to sell approximately 10 per cent of its shares during the IPO. However, the Reuters report added that these plans may be delayed.

The San Francisco-based company was valued at around $10 billion in a funding round held in 2021, where Reddit raised $410 million in a Series F funding led by Fidelity. Shortly after this, the company submitted its draft registration for its IPO with the Securities and Exchange Commission (SEC).

According to a report by TechCrunch, in January 2022 the social media company was working with Morgan Stanley and Goldman Sachs to go public with a $15 billion valuation. However, this too did not materialise.

The TechCrunch report also stated that one of the reasons for the delay in IPO is because CEO and co-founder Steve Huffman is waiting for the company to come “closer to profitability”. Reuters added that the delays may have also been due to uncertainty surrounding the IPO market.

The majority of Reddit’s revenue comes from ad sales. According to a report by The Information, two years ago, Reddit had set a goal to surpass $1 billion in ad revenue by 2023. However, it fell short of this target.

If Reddit launches its IPO this year, it will be the second first social media platform to do so since Pinterest in 2019.