Reddit Inc., the firm behind the popular social media platform that has been instrumental to the rise of a number of “meme” crypto tokens like $SHIB and $DOGE, has filed for an initial public offering (IPO) to the U.S. Securities and Exchange Commission.
Aside from the meme tokens mentioned, Reddit has also played a pivotal role in crypto discussions with its threads. Several high-profile crypto movers and developers, such as Vitalik Buterin, are very active on the platform, especially regarding discussions of Ethereum, cryptography, and blockchain technology in general. According to Reddit’s Recap 2021, the top-five most-viewed crypto communities in 2021 were r/dogecoin, r/superstonk, r/cryptocurrency, r/amcstock, and r/bitcoin.
“In 2021, there were a lot of conversations on Reddit, but none more prominent than cryptocurrency. For more than 10 years, Reddit has been home to over 500 cryptocurrency communities. As more redditors participate in conversation, whether it be for information, help, or to share major successes, Reddit continues to be the hub for cryptocurrency enthusiasts.” the company stated.
Notably, on the platform itself, there have been 6.6 million mentions of ‘crypto’ for 2021 alone. Steve Huffman and Alexis Ohanian, both University of Virginia students, launched the site in 2005. Reddit bills itself as “the front page of the internet.”
In 2006, Conde Nast acquired Reddit, after which it and subsequently spun off as an independent subsidiary in 2011 for a valuation of $200 million.
The company has not released any information on what it plans to do with the money should it be successful in raising it, but given its intimate connection with the crypto community, it is likely that the platform will receive a wave of support from the crypto space, both from regular users and huge companies.
The confidential filing has not declared the number of shares to be offered, and the price range also remains undetermined. “We are in a quiet period, and for regulatory reasons, we cannot say anything further.” Reddit stated.
Earlier this year, Reddit hired Drew Vollero as CFO, who has successfully led the strategy for Snap Inc.’s (makers of Snapchat) IPO back in 2017.
The Reddit filing was reportedly initiated sometime in 2020, but the news and official announcement of this move only surfaced this week. The company is seeking to raise $300 million in its IPO, which would value Reddit at over $3 billion. Beyond that projection, Reddit’s IPO valuation remains speculative. However, given its most recent raise of $700 million in venture capital funding on a valuation of $10 billion in August, a strong IPO lead-in would be expected.
It is also worth noting that this most recent funding round was led by Fidelity Investments, a major multinational financial services firm with strong positions in crypto investments. Fidelity also has its own institutional cryptoasset custody and cryptocurrency trading platform, Fidelity Digital Asset Services. As a major investor in Reddit, Fidelity will likely be a critical voice on key decisions in Reddit.
With a major crypto investor such as Fidelity backing it and a highly active crypto community, there’s a lot to hope for the possiblity that Reddit would itself integrate crypto technologies in its platform, similar to the moves made by Twitter and Facebook (now Meta), who have either diversified or extended their social platforms to crypto, or integrated crypto and blockchain technologies to their core stack.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
