Reddit is going public, seeking a $6.5 billion valuation after a year of upheaval that gave it more control over what CEO Steve Huffman has called a “vast corpus” of valuable data that can be used to train AI. As an example, Google recently cut a deal with Reddit worth a reported $60 million per year for real-time access to that data.
In 2021, Reddit’s first IPO attempt fizzled, but now it’s ready to try again by riding the wave of generative AI hype. After Reddit changed the terms of agreements for access to its API last year, third-party developers declared the new terms untenable and shut down many apps, sparking massive protests and sweeping changes across some of the site’s largest communities.
Reddit has also taken an unusual step by setting aside close to 2 million shares for its moderators and users as part of the deal, even if not everyone has high expectations about the company’s potential.
Correction March 11th, 12:20PM ET: A previous version of this story said Reddit’s deal with Google is worth $60 billion and misstated the number of shares that will be available for traders. The reported number is $60 million, and Reddit plans to sell 15 million shares to raise up to $519 million. We regret the errors.
Highlights
May 16
OpenAI strikes Reddit deal to train its AI on your posts
Illustration by Alex Castro / The VergeOpenAI has signed a deal for access to real-time content from Reddit’s data API, which means it can surface discussions from the site within ChatGPT and other new products. It’s an agreement similar to the one Reddit signed with Google earlier this year that was reportedly worth $60 million.
Read Article >The deal will also “enable Reddit to bring new AI-powered features to Redditors and mods” and use OpenAI’s large language models to build applications. OpenAI has also signed up to become an advertising partner on Reddit.
May 7
Reddit’s CEO confirms that a lot of user growth is coming from Google Search.Reddit’s daily users grew 37 percent to 82.7 million during its first quarter as a public company. CEO Steve Huffman said on the earnings call that 60 percent of those users are logged out and coming mostly from Google.
“Googlebot likes speed” and Reddit has focused on improving load times, he said. More on the numbers below:
Mar 21
Reddit’s stock price nearly doubled in its first day as a public company.It ended trading at roughly $50, which means the business is valued at about $9.5 billion. That’s quite a pop from the $34 that Reddit priced its shares at going into the IPO. As a result, everyone who bought in at that price— like Reddit power users — saw a nice gain today.
Reddit CEO Steve Huffman watches as the company goes public. Photo by Spencer Platt/Getty ImagesMar 21
Reddit shares jumped as much as 70 percent in their NYSE debut before dropping back.Reddit (RDDT) is officially open for trading. According to CNBC, Reddit and selling shareholders raised about $750 million from the IPO.
With its current share price of $48, the 19-year-old website now has a market cap of $7.6 billion as it pursues business growth via “advertising, monetizing commerce on the platform, and licensing data.”
Mar 20
Reddit’s IPO could cost $34 per share.Reddit’s IPO, which will have the ticker symbol RDDT, is making its debut tomorrow. Sources tell CNBC it’s priced at the “top” of the $31 to $34 range it targeted, which puts the social platform at a valuation of around $6.5 billion.
Mar 19
I chatted with Marketplace about the Reddit IPO.Many of the Redditors I spoke to did not care for the IPO. I went on Marketplace to talk about the usefulness of Reddit as an online community — and why that may just be really difficult to make profitable.
Mar 19
Nokia tells Reddit it might be infringing on Nokia's patents.In an amended SEC filing ahead of its IPO, Reddit warned potential investors that "...on March 18, 2024, Nokia Technologies sent us a letter indicating they believed that Reddit infringes certain of their patents. We will evaluate their claims."
Nokia, of course, leaned into, ahem, patent licensing and networking equipment as its business many years ago, and reminded people of it with last year’s logo redesign. Companies paying Nokia licensing fees include HTC, Apple, and more recently, Oppo.
Mar 10
Reddit seeks $6.5 billion valuation in IPO.The company hopes to raise up to $748 million when it goes public by selling about 22 million shares at $31 to $34 per share, according to a public filing issued Monday after Bloomberg first reported the number.
Part of its plan will rest on its own users and moderators, for whom the company will set aside 1.76 million shares. Reddit’s valuation would be down from the $10 billion it hoped for when it first filed to go public in 2021.
Update March 11th, 6:41AM ET: Added official filing.
Mar 8
Marketers are about to infiltrate your favorite subreddits.Ahead of its IPO, Reddit announced a set of tools for businesses that want to be more active on the platform — including the ability to see which subreddits are mentioning a brand. For businesses, Reddit says it’s a way to “establish and grow a meaningful organic presence on Reddit.” In other words: the brands are coming.
Image: RedditMar 1
Reddit will reportedly seek an up to $6.5 billion valuation when it goes public.That’s according to The Wall Street Journal, which says Reddit could shoot for a price range between $31 to $34 per share when launching its IPO. The $6.5 billion number is significantly lower than the more than $10 billion Reddit was valued at in 2021 following a round of funding.
Feb 24
A lot of Redditors hate the Reddit IPO
“Short the shit out of it.” The VergeIf you are a certain kind of cynical, Reddit’s S-1 filing sets off alarm bells. There’s the mention of r/WallStreetBets. (Five mentions in total, actually.) There’s the stockpile it’s amassed of Bitcoin and Ethereum. And there’s the program to give certain power users the option of buying stock before it debuts on the public market.
Read Article >The S-1 is a document filed with the US Securities and Exchange Commission before a company goes public. It discloses all sorts of things: revenue figures, risk factors, key data about the business. And it sends certain signals. In this case: I see some meme stock shit.
Feb 23
Reddit’s biggest risk factor is Google
Reddit CEO Steve Huffman. Credit: Illustration by William Joel / The Verge | Photo by Greg Doherty/Variety via Getty ImagesHappy Friday. Aside from Google’s Gemini fiasco and Nvidia’s blowout earnings report, the big tech news this week was Reddit detailing plans for its long-awaited IPO. Below, I get into Reddit’s biggest risk factor, the company’s fascinating relationship with Sam Altman, and more…
Read Article >The first thing I did upon opening Reddit’s IPO paperwork on Thursday was press Command + F on my keyboard and type “Google.”
Feb 22
Emma Roth, Elizabeth Lopatto and 1 more
Reddit is going public and inviting power users to invest
Image: The VergeOn Thursday, Reddit filed its S-1 registration statement with the SEC detailing its finances and business goals ahead of its imminent initial public offering on the New York Stock Exchange under the symbol RDDT.
Read Article >In its S-1 document, Reddit said it made $804 million in revenue last year, the vast majority of which came from advertising. However, the company is unprofitable, with a net loss of $90.8 million in 2023.
Feb 22
Google cut a deal with Reddit for AI training data
Image: The VergeGoogle is getting AI training data from Reddit as part of a new partnership between the two companies. In an update on Thursday, Reddit announced it will start providing Google “more efficient ways to train models.”
Read Article >The collaboration will give Google access to Reddit’s data API, which delivers real-time content from Reddit’s platform. This will provide “Google with an efficient and structured way to access the vast corpus of existing content on Reddit,” while also allowing the company to display content from Reddit in new ways across its products.
Feb 22
Google is reportedly Reddit’s $60 million per year AI content licensing customer.Charging for data access was a flash point for last year’s protests, with Reddit CEO Steve Huffman telling The Verge, ���...data licensing is a new potential business for us.”
Now, with Reddit’s IPO launch close at hand, Reuters is putting a name on rumors of an AI company that’s paying Reddit for training data, in a deal that could be a model for similar arrangements, citing three sources who say the company is Google.
Feb 21
Matt Levine has some thoughts about Reddit offering its stock to Redditors.There are rumors the Reddit IPO is happening soon. Some of the most active Redditors may get the opportunity to buy in at the IPO price. Is a new meme stock in the making? Maybe!
In the 2020s, some companies are owned in large part by retail investors, and some of those investors are more interested in being part of an online community of investors, and trading jokes and memes, than they are in financial analysis. And you can make those investors happy in less traditional ways, like by giving them popcorn or buying a gold mine or doing a YouTube interview with no pants on.
Reddit’s IPO Is for Redditors[Bloomberg]
Jan 18
The Reddit IPO inches closer.The company is now looking at March. It’s been moving toward a public offering since December 2021, shortly before the market started to dip.
Dec 26, 2023
Can Reddit still do an IPO in 2024?The well-known discussion forum, which has been rumored to be heading toward an IPO in 2024, has not done as well as it was hoping to, according to an article in The Information. Reddit was apparently hoping to earn more than $1 billion in ad revenue by the end of this year, and hasn’t quite gotten that far, having only hit a mere $800 million. Considering all the changes and controversies Reddit saw in 2023, it will be interesting to follow what happens next.
Reddit Falls Short of Ad Growth Targets Ahead of Likely 2024 IPO[The Information]
Nov 27, 2023
Reddit may be looking to go public in 2024.Bloomberg reports that Reddit is “holding talks with potential investors” about an IPO that could take place as early as the first quarter of next year.
The company filed a confidential S-1 with the SEC in late 2021 but hasn’t actually gone public yet. When I asked CEO Steve Huffman in June of this year about an IPO, he said that “it’s something we’d like to do someday.”
Apr 18, 2023
Reddit’s upcoming API changes will make AI companies pony up
Illustration: Alex Castro / The VergeReddit announced new API changes today that will eventually pinch its content pipeline from being used to train artificial intelligence tools, including the models that power OpenAI’s ChatGPT, Google’s Bard, and Microsoft’s Bing AI. AI chatbots’ abilities to provide powerful answers have data resources like Reddit to thank — and now Reddit is planning to put that robot food behind a paywall.
Read Article >Social media resources, including Reddit, are some of the sources used to train large language models (LLM) that can provide cogent responses to human prompts. Some of this data can be scraped in an unstructured manner, but Reddit’s API has helped companies make it easy to directly find and package useful data.
