Despite a net loss of $91 million on revenue of $804 million in 2023, Reddit's losses have been shrinking compared to the previous year. The company is also exploring new revenue streams, such as advertising and licensing access to its data for training AI models. Reddit's largest shareholder is Advance Magazine Publishers Inc., and about 8% of the IPO shares are being set aside for Reddit users, moderators, and some board members and friends and family of employees and directors.
Key takeaways:
- Reddit Inc. and its selling shareholders raised $748 million in an initial public offering, pricing shares at $34 each, giving Reddit a market value of $5.4 billion.
- Reddit's fully diluted valuation is closer to $6.4 billion, down from $10 billion in a funding round in 2021.
- Reddit reported a net loss of $91 million on revenue of $804 million in 2023, improving from a net loss of about $159 million on revenue of $667 million a year earlier.
- Reddit is in the early stages of allowing third parties to license access to data on the platform, including to train artificial intelligence models, and expects a minimum of $66.4 million of revenue from those agreements this year.