Reddit, known for its message boards, has announced that it has started the process of making the company public by filing a confidential S-1 with the Securities and Exchange Commission. During this year’s meme stock frenzy, the go-to destination for day traders had confidentially filed for an initial public offering with US securities regulators.
The number of shares to be offered and the price range for the proposed offering haven’t been determined yet, the company said, adding that it was in a quiet period and could not provide further details for regulatory reasons, which is standard practice.
Founded in 2005 by Steve Huffman and entrepreneur Alexis Ohanian, Reddit was valued at $10 billion in a private fundraising round earlier this year. The company was hoping for a more than $15 billion valuation by the time an IPO occurs.
US monetary policies fuels IPO
The company was considering an IPO for some time, and in August, it announced that it had raised a $700 million round of funding at a valuation of more than $10 billion. However, the filing was done as US IPOs touched record highs in 2021, fueled by ample liquidity due to accommodative monetary policies.
Reddit had roughly 52 million daily active users and over 100,000 communities, or “sub-reddits,” as of October last year. The company saw explosive growth due to retail investors flocking to its message boards at the start of the year for tips on trading GameStop Corp (GME.N) and other so-called meme stocks.
In the August announcement, Reddit said it had made $100 million in ad revenue for the second quarter of 2021, a nearly 200 percent increase from the previous year. The company said earlier this year that it planned to double its staff by the end of 2021 to around 1,400 employees.
The company’s biggest investors include Fidelity Investments, Andreessen Horowitz, Sequoia Capital and Tencent Holdings. Reddit did not disclose the number of shares to be offered or the price range of the IPO in the draft registration statement with the US Securities and Exchange Commission.