Reddit could after all go public this year.
Following Circle’s IPO filing and news from a major stock exchange that a number of companies are preparing to go public this year, Reuters reports that Reddit has “detailed plans” to go public in March.
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Now, before the rumor mill starts, let’s get one thing straight: Reddit going public in the first quarter isn’t going to open the IPO window wide open for other tech companies waiting to exit. Most unicorns in the market today build products for other businesses, while Reddit is a consumer-focused business that makes money from ads and subscriptions. However, if Reddit can pull off a strong IPO, it would help make going public palatable for companies of all kinds. An IPO right now could have more impact if this was a B2B-focused company, but you can’t always get what you want.
We may have a number of potentially large IPOs lined up today. Besides Reddit and Circle, huge companies like Shein are also reportedly busy with their S-1 and F-1 ducks in a row. They represent a potential vanguard, but in reality, they are not even a fraction of the number of companies that need to go public.
Cowboy Ventures founder Aileen Lee has written a long-awaited follow-up to her original 2013 article in which she coined the term “unicorn.” The new article is enlightening on many fronts, but one line has stuck with me: Of the 532 unicorns that Lee and Cowboy Ventures count in the US today, there have been very few exits, with only 7% (35 companies) going public in compared to 66% a decade ago.
That means we have hundreds of unicorns in the US that need to be publicized. The backlog is so large that it will take years to clear (and that’s not even counting the hundreds of unicorns around the world). The sooner the IPO window can open, the better.
