Valuation is from the WSJ article: Reddit’s Valuation Doubles to $6 Billion After Funding Round. That's $868M raised in the last three and a half years now.
What are they waiting for to go public? More eyeballs? A monetization strategy? Presumably at some point, the private equity taps will turn off. Probably at the worst possible moment.
What are they waiting for to go public?
More eyeballs?
A monetization strategy?
Presumably at some point, the private equity taps will turn off. Probably at the worst possible moment.
That would be my guess, given the failure and/or mixed success of several other unprofitable tech unicorns' IPOs (see: WeWork, Uber, Lyft, Slack, Peleton, Pinterest, etc.). And given Reddit's...
What are they waiting for to go public?
...
A monetization strategy?
That would be my guess, given the failure and/or mixed success of several other unprofitable tech unicorns' IPOs (see: WeWork, Uber, Lyft, Slack, Peleton, Pinterest, etc.). And given Reddit's similarly uncertain financial prospects, it's not surprising to me that they are seemingly acting so wary of going the IPO route. Stock market investors don't seem to be as enamoured with "growth" and raw user numbers as venture capitalists and business valuators seem to be. And while most of the aforementioned tech unicorns' stock prices have more than recovered since their dismal IPOs, it was touch and go for them for a while afterwards.
Reddit made an SEC filing today showing that they've added another $118 million to this round, making it a $368M round now, and almost $900M total raised in the last 3.5 years. From the form, it...
Reddit made an SEC filing today showing that they've added another $118 million to this round, making it a $368M round now, and almost $900M total raised in the last 3.5 years. From the form, it looks like they were offering up to $500M, so could potentially still raise even more.
A Reddit spokesperson confirmed the news, saying that the new capital is from ”new and existing investors.” They offered no specifics on names. The spokesperson did confirm that the new capital did not come with a new valuation, keeping the platform at its previously-announced valuation of $6 billion pre-money.
I think this is a pretty OK valuation. Obviously it's difficult to judge private companies as outsiders since you have to use either their numbers (which are not obligated to be truthful) or 3rd...
I think this is a pretty OK valuation. Obviously it's difficult to judge private companies as outsiders since you have to use either their numbers (which are not obligated to be truthful) or 3rd party research firms. But according to "emarketer" they had 186m in ad revenue last year.
Compare that to Twitter, which had around 800m, with a 46b valuation. Scale that down and Reddit should be in 10b range, even with their frankly half assed ad model. So the valuation seems to price in Reddit's struggle with monetization schemes.
I doubt they're profitable as is, but they have seemingly solid user growth and if they can figure out out some peripheral monetization (blog specifically mentioned their acquisition of dubsmash) and keep their ad revenue growth around what it currently is they should do fine.
I think they will most likely exit by going public, though whether through IPO or DDO I do not know. I think they have too much controversal baggage and not enough peripheral use for a big tech acquisition.
Twitter had $800M ad revenue in one quarter, not over the whole year. They announced Q4 2020 results today, with $1.29 billion revenue in the quarter. Total revenue for 2020 was $3.7 billion. So...
Twitter had $800M ad revenue in one quarter, not over the whole year. They announced Q4 2020 results today, with $1.29 billion revenue in the quarter. Total revenue for 2020 was $3.7 billion.
So Reddit's definitely way behind on revenue (if you use that $186M number, they have... 5% of Twitter's revenue), but I'm sure a lot of investors see that as unrealized potential.
Valuation is from the WSJ article: Reddit’s Valuation Doubles to $6 Billion After Funding Round.
That's
$750M$868M raised in the last three and a half years now.What are they waiting for to go public?
More eyeballs?
A monetization strategy?
Presumably at some point, the private equity taps will turn off. Probably at the worst possible moment.
That would be my guess, given the failure and/or mixed success of several other unprofitable tech unicorns' IPOs (see: WeWork, Uber, Lyft, Slack, Peleton, Pinterest, etc.). And given Reddit's similarly uncertain financial prospects, it's not surprising to me that they are seemingly acting so wary of going the IPO route. Stock market investors don't seem to be as enamoured with "growth" and raw user numbers as venture capitalists and business valuators seem to be. And while most of the aforementioned tech unicorns' stock prices have more than recovered since their dismal IPOs, it was touch and go for them for a while afterwards.
Reddit made an SEC filing today showing that they've added another $118 million to this round, making it a $368M round now, and almost $900M total raised in the last 3.5 years. From the form, it looks like they were offering up to $500M, so could potentially still raise even more.
TechCrunch has a statement:
I think this is a pretty OK valuation. Obviously it's difficult to judge private companies as outsiders since you have to use either their numbers (which are not obligated to be truthful) or 3rd party research firms. But according to "emarketer" they had 186m in ad revenue last year.
Compare that to Twitter, which had around 800m, with a 46b valuation. Scale that down and Reddit should be in 10b range, even with their frankly half assed ad model. So the valuation seems to price in Reddit's struggle with monetization schemes.
I doubt they're profitable as is, but they have seemingly solid user growth and if they can figure out out some peripheral monetization (blog specifically mentioned their acquisition of dubsmash) and keep their ad revenue growth around what it currently is they should do fine.
I think they will most likely exit by going public, though whether through IPO or DDO I do not know. I think they have too much controversal baggage and not enough peripheral use for a big tech acquisition.
Twitter had $800M ad revenue in one quarter, not over the whole year. They announced Q4 2020 results today, with $1.29 billion revenue in the quarter. Total revenue for 2020 was $3.7 billion.
So Reddit's definitely way behind on revenue (if you use that $186M number, they have... 5% of Twitter's revenue), but I'm sure a lot of investors see that as unrealized potential.