San Francisco, CA – Social media platform Reddit recently revealed in its S-1 document that it made a substantial $804 million in revenue last year, primarily from advertising. Despite this, the company reported a significant net loss of $90.8 million in 2023.
In an interesting turn of events, Reddit is offering an unspecified number of its top users – including moderators and those with high karma scores – the opportunity to purchase shares in its IPO. This privilege is typically reserved for professional investors, giving them the chance to buy stock at a lower price before it becomes available to the public.
Reddit plans to allocate shares using a tiered system, first offering them to users and moderators who have significantly contributed to Reddit community programs. Following this, those with a karma score of at least 2,000 and those who have performed at least 5,000 moderator actions will be invited to purchase shares.
The company reports having 267.5 million active weekly users, over 100,000 active communities, and a total of 1 billion posts. Reddit has also reserved 1.3 million shares of its Class A common stock to fund community-related programs empowering its users to bring their ideas to life.
Furthermore, Reddit lists data licensing and model training as part of its monetization strategy. Additionally, the company recently announced an AI training data deal with Google, providing the search giant with more efficient ways to train models and real-time access, with a reported price of approximately $60 million per year. Reddit’s advertising revenue accounts for 98% of its overall revenue.
In a filing, Reddit CEO Steve Huffman expressed great enthusiasm for Reddit’s future, highlighting the platform’s potential for growth in advertising, monetizing commerce, and licensing data. Huffman emphasized the company’s data advantage and intellectual property as crucial elements in the training of future LLMs, reflecting Reddit’s commitment to remaining human- and experience-focused in an increasingly data-driven world.