Reddit eyes IPO, boosts ad business in Asia-Pacific

Reddit is gearing up for its initial public offering (IPO) in March 2024 with a target valuation of more than $5 billion, marking a significant milestone since its inception in 2005.

The planned IPO comes as the platform faces intense competition for advertising revenue from platforms such as TikTok and Facebook.

The San Francisco-based firm known for its engaged user base which participates in various niche discussion groups and votes on content, was valued at approximately $10 billion in 2021. Reddit plans to sell about 10% of its shares in the IPO.

Whilst the $5 billion figure has been floated as a target, the exact valuation for the IPO will be determined closer to the listing date. Reddit's decision to go public follows a period of market volatility and a focus on approaching profitability.

Reddit's business model primarily revolves around advertising, with a monthly premium access option available for $5.99. However, platform has yet to turn a profit and fell short of their financial ad goals last year, having achieved $800 million in ad revenue in 2023 despite projecting more than $1 billion.

Reddit's also faced challenges including protests against its new developer fee and changes to its ad personalisation settings in 2023.  As covered by Campaign at the time, some users expressed dissatisfaction with the inability to opt out of personalised ads on the platform, prompting Reddit to update its privacy and advertising settings.

Reddit shared that users could opt out of specific ad categories, although this would not entirely remove ads from those categories. The protests and changes in advertising policies have led some brands to reduce their spending on Reddit, with the impact extending beyond the platform.

The platform also announced today that it's expanding its Asia-Pacific presence by partnering with Aleph, a digital marketing solutions provider, to engage advertisers and agencies in Cambodia, Hong Kong, Malaysia, Taiwan, and Vietnam.

Aleph's role is to facilitate market growth for significant platforms within the digital advertising ecosystem, offering dedicated sales and support teams in these regions.

“As Reddit continues to scale internationally, we must have the right teams in countries worldwide who can connect local advertisers with our local audience and drive long-term business success,” said Harold Klaje, Reddit’s chief revenue officer.

“Our Aleph partners are extensions of our Reddit Sales team, and our work together strengthens our global footprint, allowing us to reach a more diverse set of advertisers across key regions like Europe, the Middle East and now APAC.”