It seems like Reddit may finally be taking the leap and going public this year, according to recent reports.
The news comes in the wake of Circle’s IPO filing and other major companies preparing to enter the market, as reported by Reuters. The speculation is that Reddit will make its debut in March.
But before we get ahead of ourselves, let’s make one thing clear: Reddit’s IPO in the first quarter won’t open the floodgates for other tech businesses looking to go public. Most unicorns on the market cater to the needs of other companies, while Reddit is primarily focused on the consumer market, earning its revenue through advertising and subscriptions. However, a successful IPO for Reddit could pave the way for other companies to follow suit. While it may have a greater impact if it were a B2B-focused company, sometimes we don’t always get what we want.
There are a handful of potential IPOs on the horizon, in addition to Reddit and Circle. Companies like Shein are also reportedly gearing up for their S-1 and F-1 filings. These companies could serve as a trailblazer for others, but they still only represent a small fraction of the number of companies looking to go public.
In a recent article, Cowboy Ventures’ founder Aileen Lee – the person behind the term “unicorn” – shed light on the state of current unicorns. Of the 532 unicorns in the U.S. today, very few have had successful exits, with only 7% (35 companies) going public. This number is significantly lower than a decade ago, when 66% of unicorns were able to go public.
That means there are hundreds of unicorns in the U.S. alone that still need to go public. And that’s not even taking into account the hundreds more across the world. The longer the IPO window remains closed, the longer it will take to clear the backlog.
The hope is that the sooner the IPO market opens up, the better. Fingers crossed that Reddit’s potential IPO in March can kickstart the process and set a positive example.