- Revenue increased more than 20%, from $666 million in 2022 to over $800 million in 2023.
- The company is unprofitable. Adjusted EBITDA is negative $69 million.
- Its listing is closely watched and a bellwether for tech IPOs.
- It’s expected to unveil a public IPO filing as soon as this month.
- It could start marketing its IPO as soon as March.
These assertions can’t be confirmed as accurate until the company files its S-1 with the SEC (reporters, being human, can make mistakes).
Assuming the info is accurate, I have a few thoughts:
- This IPO will likely be a bellwether given Reddit’s brand awareness among tech and non-tech investors and the timing—if it happens, it will be the first tech IPO of 2024. This means it will be watched closely by VCs and founders. Its performance will influence other companies considering an IPO in the first half of this year.
- Last year’s fall IPOs of Instacart and Klaviyo haven’t performed well to date. Both are still trading below their IPO offering prices, even as the NASDAQ is nearing all-time highs (more on that here). What about Reddit’s offering will be different and get enough investors interested in purchasing shares?
- Reddit is most likely free cash flow negative and burning cash—I’m not sure at what rate or how close they are to being cash flow breakeven. But I wonder how this will impact public-market investor receptiveness to this listing. Instacart and Klaviyo both reported positive free cash flow for the 2023 quarters proceeding their IPO, and those listings haven’t performed well.
- I suspect public-market investors are rethinking revenue multiples for technology companies. I’m curious to see how investors value Reddit given that it’s likely consuming cash.
I’m looking forward to Reddit filing its S-1 so I can dig in. If the company decides to proceed with the listing, I’m really curious to see how investors receive this company.