Reddit, the community-focused message board, filed to go public on Thursday, paving the way for it to be the first major social media company to debut on the stock market in years and a test for private companies. after an initial stock market drought. Offerings.

in a offer prospectus, Reddit revealed its financial performance in preparation for selling shares to investors. The San Francisco-based company reported that its revenue rose more than 20 percent as its losses narrowed last year. It added that it had 73 million daily users and more than 100,000 active communities.

The prospectus begins a process in the stock market, in which the 18-year-old company will meet with potential investors to whet their appetite to purchase its shares. Reddit could list on the New York Stock Exchange within weeks under the stock symbol RDDT. The company was valued at more than $10 billion in a 2021 private financing.

Reddit is the latest in an older generation of social media companies to take aim at the stock market, following Facebook’s high-profile offering in 2012, Twitter in 2013, and Snap in 2017. In the years since, the social media industry has changed and faced scrutiny from misinformation, hate speech, and other effects. Some of the companies have changed addresses; Facebook was renamed Meta and Twitter was bought by Elon Musk, who privatized the company in 2022 and renamed it X.

Reddit’s move is also highly anticipated after a lull in initial public offerings. Only 108 companies went public in the United States last year, about a quarter of those that debuted in 2021, according to data compiled by Renaissance Capital. Some of the biggest tech deals last year were Arm, a chip designer, and Instacart, a grocery delivery company.

“We are going public to advance our mission and become a stronger company,” Reddit CEO Steve Huffman said in a founder letter included in the prospectus. “We hope that going public will also provide significant benefits to our community. “Our users feel a deep sense of ownership over the communities they create on Reddit.”

Huffman added that the company wanted “this sense of ownership to be reflected in real ownership, that our users were our owners” and that “becoming a public company makes that possible.” Reddit said it would reserve a portion of its shares at the IPO price for 75,000 of the company’s most prolific users if they wanted to buy them.

In its prospectus, Reddit said revenue in 2023 was $804 million, up about 21 percent from $666 million a year earlier. The company lost $90 million in 2023, compared with a loss of $158 million the year before, according to the prospectus.

Some of its largest shareholders include Advance Magazine Publishers, Tencent Cloud Europe, Vy Capital, Fidelity Management and Sam Altman, former board member of Reddit and CEO of OpenAI.

Reddit’s road to the public markets has been long and difficult. Founded in a University of Virginia dorm in 2005 by Huffman and Alexis Ohanian, the site began as a destination for anonymous users to meet and discuss anything from popular television shows to guitars, makeup, and power washing machines.

The site was unique because it focused largely on tight-knit, mostly anonymous communities, all moderated by volunteers who self-governed their forums, or “subreddits,” based on rules they themselves had created. He became known for “AMAs,” also known as “ask me anything” sessions, sometimes with public figures such as former President Barack Obama, Microsoft’s Bill Gates, and actor Nicolas Cage.

The company has raised hundreds of millions of dollars in funding over the years, including $250 million and more than $410 million in two funding rounds in 2021. Investors include Fidelity Investments, Andreessen Horowitz, Sequoia Capital and Tencent Holdings. Like other early social media efforts, Reddit initially avoided offering advertising and making money. Instead, it focused on forms of income that arose from community ideas, such as a user-generated e-commerce system and prizes that users could purchase from each other. Those ideas are still in play.

Reddit finally adopted advertising based on its topic communities. Brands like Laneige, for example, directed ads to a forum called Makeup Addiction, one of the most active subreddits, where users discuss cosmetics and how to apply them.

The site has also created an emerging data licensing business based on its huge corpus of conversation data, which has become increasingly important amid the artificial intelligence frenzy. AI models are trained with large amounts of such data so that they can become more powerful. On Thursday, Reddit announced a licensing deal with Google, which has used Reddit data to train and build its artificial intelligence systems.

“We expect our data advantage and intellectual property to continue to be a key element in training” future AI models, Huffman said in the letter. The company has a number of undisclosed licensing agreements to use its data and expects to earn more than $203 million over the next three years from those contracts, according to the document.

The site has had its share of struggles. It faced controversy after controversy for its refusal to moderate communities in its early years, including its role in spreading misinformation during the 2013 Boston Marathon bombing and for hosting racist and misogynistic content on some of its smaller subreddits. . Last year, Reddit faced a user revolt after changing some of its rules and restricting third-party developers from using the site’s content without paying for it.

Reddit has reversed its position on moderation and updated and more strictly enforced its policies in recent years, making it more attractive for marketers to place advertising on the site.

The company also had a revolving door of leaders in its first decade, being led by four CEOs before Huffman returned to lead the site in 2015.

Reddit warned potential investors that it faced potential challenges and risks as a public company, including the emergence of large language models, the underlying artificial intelligence systems that could potentially aggregate and synthesize the site’s content and allow users to view Reddit without visiting the site or see advertising.

The company may also face difficulties courting brands in a digital advertising market dominated by Meta and Google.

“Reddit may face an enormous challenge in growing its advertising business, given the gap between its platform’s capabilities and best-in-class capabilities,” said Eric Seufert, an independent mobile analyst who closely monitors social media companies and advertising.

The company also warned that it relied heavily on its community to moderate the platform and that future revolts or exits could damage the site.

“We have a lot of opportunities and a lot to do,” Huffman said.