Reddit advised to target at least $5 billion IPO valuation: Bloomberg

The news: Reddit has been told by potential investors in its upcoming initial public offering that it should consider a valuation upwards of USD5 billion ($7.6 billion), Bloomberg reported, citing unnamed sources.

The numbers: The sources said the US social media company is targeting a valuation in the mid-single-digit billions, though the final figure will depend on the IPO market’s nascent recovery. Meanwhile, private trades of Reddit's unlisted shares have valued the company below this amount, with brokerage platforms Rainmaker Securities and Forge Global Holdings implying a valuation of up to USD4.8 billion.

The context: Reddit, which is considering a possible listing as early as March, raised funds at a USD10 billion valuation in 2021, with Bloomberg News reporting in 2022 that the company could have been valued at USD15 billion in an IPO at the time. However, since then the market for first-time share sales has frozen, tech giants have experienced mass layoffs and the companies that did go public were valued at less than where they raised money privately.