March 21 (Reuters) – Social media platform Reddit’s
market debut on Thursday ended a more than two
year-long wait but shifts the focus to how it will compare with
the other publicly listed peers.
Despite its cult-like status, the company has failed to
replicate the success of Meta Platforms’ Facebook and
Elon Musk’s X.
Here’s how the 19-year-old company compares with the larger
social media companies:
REVENUE
With just more than $800 million in annual revenue, Reddit
is much smaller than peers. Most of the company’s revenue comes
from ads as its communities of users post and discuss everything
from history to stocks and AI, making it a valuable platform for
some advertisers.
Reddit recently struck a deal with Alphabet’s
Google unit to license its data for training large language
models — the technology behind generative AI applications like
Gemini.
VALUATION, IPO FUNDS RAISED
Reddit’s IPO raised $748 million after it was priced at the
top end of the $31 to $34 range, valuing the company at $6.4
billion.
That said, Reddit’s IPO valuation is less than half of what
X, then Twitter, and about one-fourth of what Snap had
at their respective IPOs.
Facebook, rebranded as Meta in 2021, was valued at more than
$100 billion in its IPO in 2012 in the biggest listing for a
social media firm. Meta, also home to Instagram and WhatsApp,
counts nearly half the world’s population among its users.
USER NUMBERS
As a niche platform, Reddit caters to over 70 million daily
active users, far lower than peers. The platform has more than
100,000 online forums.
Still, Reddit has some advantages. It has a relatively lower
expenses profile and strong growth rates for its ads business.
Brokerage Bernstein said Reddit’s revenue to full-time
employees ratio is 50% lower than both Snapchat and Pinterest,
and 80% lower than Meta, while the 25% revenue growth is “up
near Meta and Amazon ads levels.”
(Reporting by Yuvraj Malik and Zaheer Kachwala in Bengaluru;
Editing by Sriraj Kalluvila)
