Reddit, the popular online forum, has filed for an IPO. This is big news for the company, as it looks to raise money that will help it grow and compete with other social media platforms.
Reddit was founded in 2005 and is now one of the most popular websites in the world. It has 330 million monthly users and 15 billion page views per month. However, it has been slow to turn a profit, and so is looking to raise money through its IPO.
The company plans to list on the Nasdaq stock exchange under the symbol “REDD”. It is not yet clear how much Reddit plans to raise, or what valuation it expects. However, given Reddit’s popularity and the growth of social media, Reddit is likely to be valued highly by investors.
Reddit has secured $200 million in venture capital funding from some of the world’s largest technology companies, including Andreessen Horowitz and Sequoia Capital. Reddit also recently signed a lease for new headquarters that it will move into later this year.
Reddit plans to sell about 10 per cent of the company in its ipo, which will leave current shareholders with 90 per cent of Reddit. The company hopes that public money will help it to expand further and improve its mobile presence in order to compete with other social media platforms like Facebook and Snapchat. Reddit is currently not very profitable but says that it expects this to change when its traffic increases due to greater advertising revenue.
Reddit already generates nearly all of its revenue from advertising, making $8.3 million in 2014 and has already made $20 million this year. Reddit plans to use the new funds for further international growth and development of new products like Redditmade, Reddit notes and third-party mobile applications.
Reddit is also considering using some of the new funds to buy back shares from investors as a form of investment. Reddit co-founder Alexis Ohanian said that “reddit aspires to be a platform where people can do the impossible”.