US Reddit to Launch NYSE Listing Next Month... Will It Become the Second Instacart?

Reddit, a major online community in the United States, is set to go public on the New York Stock Exchange this March.

On the 22nd (local time), Reddit announced in a securities registration statement submitted to the U.S. Securities and Exchange Commission (SEC) that it is pursuing an initial public offering (IPO) under the ticker symbol 'RDDT'. This marks the first IPO of a major technology company this year and the first social media company IPO since Pinterest in 2019.

[Image source=Getty Images Yonhap News]

Specific offering prices and terms have not yet been disclosed. Major foreign media outlets have reported Reddit's valuation at a minimum of $5 billion (approximately 6.6 trillion KRW). However, this is far below the valuation of over $10 billion it received during private funding in 2021. Consequently, some investors have expressed concerns that Reddit's IPO might follow the same path as the grocery delivery platform Instacart. Instacart was valued at $39 billion in 2021 but was worth only $9.9 billion at its IPO in September last year.

Founded in 2005, Reddit is a social media platform with 73 million daily users. Following the pandemic, a craze for investing in "meme stocks" in Reddit's stock discussion forums helped it establish itself as a leading online platform in the U.S. Last year, its revenue reached $804 million, a 20% increase compared to the previous year. Although it has operated at a loss since its inception, its net loss last year was $90.8 million, reduced from $158.6 million the year before. Its main revenue source is online advertising through its website and mobile applications.

Reddit currently estimates the accessible advertising market, excluding China and Russia, to be worth $1 trillion, and expects this market to expand to approximately $1.4 trillion by 2027. It also confirmed plans to introduce artificial intelligence (AI) to expand its advertising business. On the same day, Reddit signed an AI content licensing agreement with Google. Under this agreement, Google will apply Reddit's content for AI model training and other purposes. Additionally, economic media outlet CNBC reported that Reddit is also exploring business strategies similar to those of Roblox.