Reddit has priced its shares at the top of the marketed range, valuing the social media platform at $6.4 billion (£5 billion). The company raised $748 million by selling 22 million shares at $34 each, making it one of the largest initial public offerings (IPOs) by a social media firm.
In a notable move, Reddit offered some of the shares to its users, although the number of users who participated has not been disclosed. The company’s road to profitability seems to be driven by AI models, with firms like OpenAI, the developer of ChatGPT, paying for data from Reddit conversations.
Google reportedly paid Reddit $60 million for the rights to scan nearly two decades of discussions to enhance its AI, while Reddit has secured licensing deals worth over $200 million for the next two to three years.Despite posting a loss of $90.8 million in 2023, Reddit anticipates profitability with the influx of revenue from AI firms.
Source: Vanguard