Asia Tech Wire (Feb 23) -- Reddit, an American social media platform backed by Chinese tech giant Tencent, released its long-awaited IPO filing on Thursday.
A Form S-1 filed with the U.S. Securities and Exchange Commission (SEC) shows that Reddit's second-largest shareholder is Tencent Holdings Limited (0700.HK) with an 11% stake, while OpenAI CEO Sam Altman owns 8.7% of Reddit.
Reddit is targeting a valuation of at least $5 billion in the IPO, the New York Times reported, citing people familiar with the matter.
San Francisco-based Reddit was co-founded by current CEO Steve Huffman in 2005 with American internet entrepreneur Alexis Ohanian, husband of tennis champion Serena Williams.
Although Reddit started at a time close to that of Facebook and Twitter (now X), its current user base and reach lags far behind the other two.
Reddit said it had an average of 73.1 million daily active users (DAUs) and 267.5 million weekly active users in the three months to December 31, 2023.
And there are more than 100,000 active communities on Reddit with a cumulative total of 1 billion posts, the company said.
In its IPO filing, Reddit said the company achieved $804 million in revenue in 2023, a 21% increase from $666.7 million in revenue in 2022.
Huffman posted on Reddit last June that the company, which generates revenue primarily through advertising and offers premium access for a monthly fee, has yet to turn a profit.
Advance Magazine Publishers Inc., a publishing company belonging to the Newhouse family is Reddit's largest shareholder with about 30% of the shares, according to the IPO filing.
Altman's ties to Reddit run deep, as he, along with Huffman and Ohanian, were among the first batch of entrepreneurs at startup accelerator Y Combinator in 2005.
He even briefly served as Reddit's interim CEO after former CEO Yishan Wong resigned. However, he only served for eight days before appointing Ellen Pao as his replacement.
Reddit has struck a deal with Alphabet Inc.'s Google to use its content to train the search engine giant's artificial intelligence models, according to the latest media reports. The contract is worth about $60 million a year, per Reuters.
In 2020, Reddit acquired TikTok competitor Dubsmash in an effort to increase its appeal to younger users.
Prior to the disclosure of its IPO filing, Reddit had secretly filed for a U.S. IPO in late 2021, but tough economic conditions and the poor performance of tech stocks caused the company to delay its IPO plan.
Reddit hired Morgan Stanley and Goldman Sachs as lead underwriters for its IPO, with more than a dozen other financial institutions as co-underwriters.
