Unruly Reddit prepares for stock market debut with ads deals

Reddit, the home of the anarchic r/WallStreetBets trade-tipping forum, is preparing for its own stock market debut by stepping up its push to build an advertising business around the social media platform.

The San Francisco-based group, led by 38-year-old chief executive Steve Huffman, has been approaching big ad agencies such as global giant WPP in the search for new marketing deals that can underpin its future business, according to several people familiar with the situation.

Reddit is making a tricky pitch. The company is inviting brands to target its highly engaged and loyal communities, even if their edgy discussions are not traditionally the sort that risk-averse companies want to be associated with.

That has left Reddit, known as a bastion of free speech, walking a delicate tightrope between its outspoken audience of 330mn monthly active users and new advertisers that can propel it into profitability. The same conundrum around content moderation still affects listed tech groups, such as Facebook and Spotify.

“More brands are being open to them,” said David Jones, chief executive of The Brandtech Group and former CEO of Havas, noting Reddit’s “influential” and tech-savvy user base. “When memestock mania happened, it showed there’s a huge amount of power there.”

Reddit expects to launch an IPO this year, after lodging a confidential filing to go public with the US Securities and Exchange Commission in December. One person briefed on the plans pointed to past media reports suggesting the company would seek a valuation of up to $15bn. Reddit was valued at $10bn after a funding round last August led by Fidelity Investments. To date, Reddit has raised a total of $1.3bn, according to data from PitchBook.

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As part of its transformation, the company is exploring a partnership deal with WPP, the world’s biggest ad agency, according to two people with direct knowledge of the talks. Such deals typically grant an agency’s clients discounts or early access to ad products in return for a commitment on spending from the agency. Reddit declined to comment.

Mark Read, chief executive of WPP, also declined to comment on a potential partnership, but described Reddit as a “unique property” that was attractive to his agency’s clients in gaming, tech and the automotive sector. He added that after spending “close to zero” on the platform several years ago, WPP’s clients were spending “double-digit millions of dollars”. 

Last year, Reddit set up its first in-house creative agency called KarmaLab and launched a new ad product that can be embedded within its conversation threads after testing it with 600 advertisers, including HBO Max and Adobe.

Reddit has also bolstered its leadership team. It hired its first…