Reddit’s IPO Might Finally Be On the Horizon

The online platform looks for steadiness in the financial markets after a mini-revolt among users.

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When better to IPO your social media company than 2024? 

Reuters reported on Thursday that Reddit is planning to go public in March, after many years with its planned IPO simmering just below boiling point. Sources told Reuters that, as always, the timeline could be widened — but if the company goes public at any point this year it will be the first major social media IPO since Pinterest in 2019. They obviously don’t subscribe to our popular subreddit, R/IPOdesertmemes.

The Lament of the Moderators

Reddit’s impending IPO comes six months after the company got into a major scuffle with the very people who make its platform worth visiting: the users. Reddit is divided into thousands of “subreddits,” essentially special-interest forums where users congregate for discussions. They’re typically moderated by Reddit users, and in June those users mounted a full-scale revolt against the company after it changed the rules around using its application programming interface (API) policies, effectively charging a fee for people to wire Reddit’s back-end technology into other apps.

With an IPO reportedly imminent, it makes sense why Reddit would look for ways to generate more revenue. But it came at the expense of riling up its core users, many of whom use separate apps to help them moderate the mountains of posts that spring up in their subreddit parishes:

  • Thousands of the site’s most popular subreddits shut down for a week in the summer, but Reddit didn’t back down, blaming the rule change on the huge demand by tech companies using the platform for AI training. “Reddit needs to be a self-sustaining business, and to do that, we can no longer subsidize commercial entities that require large-scale data use,” CEO Steve Huffman said at the time.
  • Reddit ultimately rode out the storm, although some users told The Guardian they’ve noticed a deterioration in the quality of the content. Perhaps they can establish a combined support group with Twitter/X users.

It All Ads Up: Although Reddit might have fended off a user revolt, advertisers might prove a more elusive bunch. According to The Information, the company didn’t quite hit its ad sales targets for 2023 — which again, may go some way toward explaining the mid-year API changes. Meanwhile, as Reddit balks at the idea of large language models scouring its site for material to ingest, Meta gleefully announced on Thursday its own AI tools have grown returns on ads by 32%.