Reddit Inc. is weighing feedback from early meetings with potential investors in its initial public offering that it should consider a valuation of at least $5 billion, according to people familiar with the matter. even when estimated below that figure in the volatile private equity market.
The San Francisco-based social media company and its advisers are targeting a valuation in the single-digit billions, said the people, who asked not to be identified because the information is private. The final figure will depend on the IPO market’s nascent recovery, the people said. Reddit is considering a possible listing as early as March, the people said.
Separately, private transactions in Reddit’s unlisted shares have valued the company below $5 billion. Potential buyers on the Rainmaker Securities platform have submitted offers indicating a value of between $4.5 billion and $4.8 billion. Forge Global Holdings Inc.’s database shows a derivative price based on secondary activity that implies a valuation of $4.8 billion.
These deals sometimes indicate a lower valuation than a company could achieve in an initial public offering, since private shares are relatively illiquid.
Deliberations on the IPO are ongoing and details such as the valuation target and timeline are subject to change. A Reddit spokesperson declined to comment.
The valuations considered demonstrate the extent of the technology retreat since the heady days of the private finance boom that peaked in 2021.
Reddit raised funding that year at a valuation of $10 billion, and could have been valued as much as $15 billion in an initial public offering. Bloomberg News reported in 2022.
Instead, the market for first-time stock sales froze, tech giants began rounds of layoffs and companies that went public were valued at less than they raised money privately. Instacart, whose valuation peaked at $39 billion in March 2021, It debuted in September 2023 with a valuation of $9.9 billion. As of Friday, it had a market value of about $7.1 billion.