The Journey to Public

Reddit’s path to the public markets has been anything but straightforward. Initially sold in its infancy, it was later spun back out as an independent entity. Today, it stands on the brink of a public offering, boasting over $800 million in revenue for 2023, a notable increase from $666.7 million in 2022. Despite this growth, Reddit has yet to achieve profitability, raising questions about its potential valuation upon listing.

In 2022, the platform reported a net loss of $158.6 million, with its adjusted EBITDA sitting at negative $108.4 million. These figures saw improvement in 2023, with a net loss narrowing to $90.8 million and negative adjusted EBITDA improving to $69.3 million. The final quarter of 2023, however, painted a more optimistic picture, with Reddit posting a net profit of $18.5 million, despite ending the quarter with negative free cash flow of $22 million.

Sam Altman is revealed as Reddit’s third-largest shareholder, owning approx. 8.7% of the company ahead of its IPO.

Estimates suggest that Altman’s stake is worth $435M from a $60M investment.

Here’s the cap table: pic.twitter.com/i2GhHZkVYV

— Chief AI Officer (@chiefaioffice) February 23, 2024

Capital and Valuation

Throughout its tenure as a private entity, Reddit raised over $1 billion, with significant rounds of funding in 2021 driving its valuation into the billions. Yet, as Reddit prepares for its IPO, these “bubble-era” valuations will be scrutinized under the intense gaze of the public market.

An IPO with a Novel Approach

In an innovative twist, Reddit plans to offer an unspecified number of shares to 75,000 of its users at the IPO price, a privilege typically reserved for large institutional investors. This strategy not only underscores Reddit’s commitment to its community but also represents a novel approach to public offerings.

Strategic Partnerships and Growth Prospects

The timing of Reddit’s IPO filing is opportune, coinciding with a reported $60 million per year data use agreement with Google. This deal, which represents a significant portion of Reddit’s revenue, exemplifies the potential for additional revenue streams through partnerships with other AI model providers, such as OpenAI.

Reddit’s S-1 filing reveals plans to license access to its historical and real-time data, a move that could significantly enhance its revenue streams. With a growing user base and a 27% increase in global daily active users in the last quarter of 2023 alone, Reddit’s market potential appears robust.

The Road Ahead

As Reddit embarks on its public journey, the broader implications for the tech and investment sectors are immense. Successful navigation of the public markets could not only validate Reddit’s business model but also encourage other late-stage tech companies to consider public listings.

We encourage our readers to share their thoughts and predictions about Reddit’s public debut in the comments below. How do you think Reddit’s IPO will impact the broader tech ecosystem? Let’s discuss.

Photo by Brett Jordan on Unsplash

The post Reddit Announces IPO Filing — Finally. first appeared on Tech Insight.

Twitter’s Rebrand to X

Twitter has now changed its name to X… as in SpaceX. If the many changes Elon Musk has made to the platform since taking over last year weren’t enough, this rebrand seems to be the nail in the coffin for many users. TechCrunch even shared information on how to change the logo back to the blue bird on your phone. 

Since his takeover, Musk’s leadership has cost the platform millions of users. Some predict the number could even amount to 32 million. There are many reasons for this mass exodus. Security is an issue for some. It’s been reported the company’s trust and safety team saw their systems crashing “at least once a day”. And since the changes made to the blue tick, many more fake accounts have been made. 

Alongside this, Musk is promoting the platform’s supposed free speech agenda. Kanye West, formerly banned from the platform for violating their rules “against incitement to violence”, has been reinstated. The company has also now decided to sue a hate speech watchdog group. 

This rebrand comes only shortly after Linda Yaccarino was instated as the new CEO, presumably meant to fix the mess Musk had made in the six or so months prior. One of the first things she did in the job was get the company to start paying their Google Cloud bills that Musk had been holding ransom. Still however, their ship is in choppy waters. 

Is Threads The New Twitter? 

The new Twitter rival only launched a month ago but has already lost over half of its users. The app beat ChatGPT’s record by reaching 100 million users in just five days. But that initial success was not to last. 

Amid the recent tumult at Twitter, you’d expect this would be prime time for a rival to launch an attack. Despite this fertile ground, users of the new app aren’t happy. Many found they couldn’t delete their new Threads account without deleting their much loved Instagram accounts. The company hopes an injection of new AI chatbots could regain some of their losses. 

But what are the real differences between Threads and Twitter? Well, for a start Threads forgoes the 280 character limit so central to Twitter’s format. Seen as restrictive to some, this may actually be an important ingredient of the platform, cutting out unnecessarily rambling and appealing to our diminishing attention spans. 

Threads, as the name suggests, allows users to thread together their threads! This means no more tweets with ‘(1/2)’ at the end. Along with ditching the character limit, these changes seem to indicate that Threads wants to allow for more long form content. They may be onto something too, as we’re seeing Youtube videos and podcasts stretching into 2 hour long chunks of time, why would this change not also occur on text based platforms? 

Conclusion 

X and Threads are fighting a tough battle, X to survive, Threads to take over. If we’re honest though, neither are looking like particularly strong contenders. Both have huge numbers of users quitting their platform along with branding and technical issues. Do you think either one will come out on top or is this social media format simply past its prime?

The post The New Social Media: Threads v. Twitter, now X  first appeared on Tech Insight.

What are Threads?

You can tell you’re getting old when a new social media platform launches and you have no clue how it works. Do not worry though because I have done the research for you. Threads is basically a text-based social media platform that is connected to your Instagram account. Those who are lucky then will not have to add their mum as a friend! (Unless of course they suddenly work out how to use Instagram).

Simply by logging into your Instagram credentials, you can then create a Threads account. The beauty of this you see, especially if you crave followers, is that your following list from your Instagram carries over. Thus totally eliminating the need to start from scratch. How appealing does that sound?

Twitter vs. Threads: The Ultimate Showdown

At no surprise, Twitter and Threads are weighing up as some pretty hefty competition. But this is just the reality when it comes to social media. For many, many (and many) years Twitter has always remained supreme as the quirky, character-led social media platform.

Unlike Instagram where your looks got you likes or a cute puppy, on Twitter your personality got you likes. Imagine saying you had a viral tweet over discussing how great being told you make a cup of tea is as a compliment. Kind of hits differently than saying your photo of your smoothie bowl got 10k likes on Instagram right?

Unfortunately, Elon Musk got his greedy paws on Twitter and has ultimately changed the love people had for it. Unpopular changes such as limiting tweet viewing and potential charges, it comes expected that Threads has hit the ground running. Although still a newbie it holds some promise. Offering a user experience that mirrors Twitter whilst maintaining a unique focus on community-building. Furthermore, the integration with Instagram gives it a strong position within the social media terrain.

What Does This Mean for B2B Marketers?

No doubt, social media managers and marketers alike this past week felt faint at the idea of another platform being added to their never-ending task flow. Looking through an alternative angle, Threads does however present itself as something more than a new platform.

A key benefit is that it fosters community engagement. Businesses are able to stay connected with their target audience by actively participating in any relevant conversations whilst viewing insights into emerging trends. Additionally, businesses can showcase their expertise, leadership is a key differentiating factor in the world of B2B and Threads provide a unique platform for this.

Threads are being viewed as a breath of fresh air in a space where attention spans are getting shorter and short (thanks TikTok). However, by emphasising a space for genuine engagement and community building, businesses are given a refreshing opportunity to differentiate themselves.

Emerging as a powerful tool in the B2B social media landscape. Threads are set to change communication, collaboration and advertising. Businesses can now tell captivating stories whilst showcasing their expertise within a threaded conversation.

Will you be using Threads? 

For more fun tech insight, check out AI Rivalry Intensifies: Elon Musk xAI Promises a Brave New World 

The post ​​How Will Threads Influence the Future of B2B Marketing? first appeared on Tech Insight.