Reddit is reportedly reviving its plans to go public, though at a lower valuation than the $15 billion it had hoped for in 2019. The company is looking for funding to help it grow and expand its advertising business. Despite increased user engagement, Reddit has struggled to attract advertising revenue due to brand safety concerns and offensive content on the site.
According to people familiar with the situation, the company intends to list on the stock exchange in the second half of 2023 through an initial public offering. Reddit announced in December 2021 that it had confidentially filed papers to begin the process of going public. According to Reuters, the company was hoping for a valuation of more than $15 billion after receiving a $10 billion valuation in a private funding round in August 2021.
The recent turmoil in the meme stock market, which has driven up the prices of certain stocks on the site, is likely to have an impact on Reddit’s valuation. This has resulted in increased regulatory scrutiny and a greater emphasis on ensuring the platform’s safety and integrity.
While the timing of the IPO is uncertain, Reddit is said to be considering a direct listing, which would allow it to go public without raising additional funds. Other tech companies, such as Spotify and Slack, have used this approach.
The decision to go public comes at a time when social media platforms are under increasing pressure to address issues such as content moderation, misinformation, and user privacy. In order to maintain investor confidence and complete a successful public offering, Reddit will need to demonstrate that it can effectively manage these challenges.
The sources for this piece include an article in BusinessInsider.