The company raised $315 million in the offering, setting an initial valuation of around $2.67 billion. Shares are trading on Nasdaq under the symbol WBTN.

Although headquartered in Los Angeles, Webtoon has its roots in Korea. It’s majority-owned by South Korea’s Naver, which had a 71% pre-IPO stake, and Japan’s LY Corp., with a 29% stake.

Webtoon was launched in Korea nearly 20 years ago as the brainchild of its CEO, Junkoo Kim, then a search engineer at Naver. The founding vision was to create a platform for comic creators to reach a wider global audience.

Since then, Webtoon’s well-known format displaying art and text in a single continuous, vertical scroll has caught on in a big way. The company estimates that half of South Koreans visit the platform each month. It also has broad global reach, with an estimated 170 million monthly active users each month across more than 150 countries.

Between 2017 and 2023 it has paid out over $2.8 billion to creators who publish on its platform, Webtoon says. The average professional creator, it adds, is earning $48,000 a year and the top 100 are earning $1 million.

In the first quarter of this year, Webtoon had revenue of $327 million and net income of $6 million. In all of 2023, meanwhile, Webtoon had revenue of $1.28 billion, and posted a net loss of $145 million.

Illustration: Dom Guzman

That was the finding from an analysis of recent exits for American companies on the Crunchbase Unicorn Board. Over the past 12 months, just 15 private, venture-backed companies valued at $1 billion more have gone public or gotten acquired. 

Meanwhile, another 741 U.S.-based private, venture-backed companies remain in existence that met or exceeded the $1 billion threshold at their last reported valuation. If the exit tempo of the past 12 months stays the same, it would take just over 49 years to get through that backlog. 

Recent historical perspective

Luckily, one constant in the startup world is that nothing stays the same. And given that exit activity has been slower than usual this past year, it’s reasonable to expect it will pick up.

Still, it’d take some NASCAR-level acceleration to get through a backlog this big. Even in 2021, the peak year on record, a total of 86 known unicorns carried out exits, per Crunchbase data. And that was pretty unusual.

Typically, the annual crop of unicorn exits is far smaller. For the past five years, it’s averaged 38 per year. At that pace, it would still take nearly 20 years to get through the current unicorn supply. 

Not everyone exits

Of course, this is a theoretical exercise. No one expects every company once anointed with a coveted $1 billion-plus valuation will go on to exit. Some will fail, either shuttering and liquidating assets or filing for a bankruptcy reorganization.

In the past year, we’ve seen a number of private unicorns shut down or file for Chapter 11 bankruptcy. The list includes former high-flyers like trucking logistics startup Convoy, homebuilder Veev, and health benefits automation provider Olive AI.

Others could conceivably stay private indefinitely. SpaceX, the most valuable U.S. unicorn, has proven it’s possible to take this route and prosper. More broadly, a booming secondary market for shares in private companies has opened up a path to liquidity that doesn’t require a formal exit event.

Big exits make the difference

As for traditional exits, quality tends to matter more than quantity. 

Startup investment is a hits business, and just a handful of standout success stories provide a lion’s share of returns for VCs.

In this respect, the past year hasn’t been too bad. Although startup IPO valuations haven’t broken any records, we have seen some pretty large public offerings and strong aftermarket performance.

One of the leading lights of the past year is Astera Labs, a developer of connectivity technology that went public in March and had a recent market cap around $11 billion. Other standouts include Reddit ($8.9 billion market cap), Instacart ($8.8 billion market cap), Klaviyo ($6.5 billion market cap) and Rubrik ($5.9 billion market cap).

Acquisitions, however, have not delivered big unicorn exits this past year. Even some of the pricier deals — like Atlassian’s purchase of collaboration tools provider Loom for $975 million — did not cross the $1 billion mark. Others, like e-commerce aggregator Perch and online learning platform Udacity, fetched prices believed to be far below their former unicorn valuations.

More IPOs, please

Going forward, realists don’t expect all or even most onetime unicorns to achieve an exit worthy of a 10-figure private valuation. Everyone knows startup values got bubbly a couple years ago, and have since come down for most sectors.

Still, it’d be nice — and arguably necessary — to see the pace of unicorn IPOs pick up. Public markets have proven receptive in recent months. And unicorn shareholders don’t have 49 years to wait.

Related Crunchbase Pro queries

• Exited US Unicorns
• US Unicorns

Related reading:

• The Crunchbase Unicorn Board
• The Crunchbase Billion-Dollar Exits Board
• Deal-Making Involving VC-Backed Startups Picks Up Slightly, But Still Slow
• Former Unicorns Are Bouncing Back From Bankruptcy

Illustration: Dom Guzman

Palo Alto, California-based Rubrik priced its initial public offering at $32 a share on Wednesday, above the projected range of $28 to $31. The offering raised around $752 million for the company, and set an initial valuation around $5.6 billion. Shares are trading on the New York Stock Exchange under the ticker symbol RBRK.

Founded in 2014, Rubrik pitches itself as a provider of tools for organizations to secure their data across the cloud and recover from cyberattacks. The company’s IPO prospectus also plays up its AI expertise, stating that it can “apply artificial intelligence and machine learning directly to business data to understand emergent data security threats and deliver cyber recovery.”

Rubrik raised considerable funding as a private company, pulling in more than $550 million in known financings. Its largest venture shareholders include Lightspeed Venture Partners and Greylock Partners, both early-stage lead investors.

While Rubrik is growing briskly, it remains far from profitable. The company reported $538 million in revenue for its last fiscal year, which ended Jan. 31, up 42% from the prior fiscal year. However, the company’s net loss also widened, hitting $354 million in the just-ended fiscal year, up from $278 million in the previous year.

Strong post-offering performance from Rubrik could go a long way to bolster confidence in the tech IPO market. Last month saw big debuts from Reddit and Astera Labs, which have performed relatively well so far. Reddit is well below its peak, but shares remain above where they initially priced. Astera’s shares have roughly doubled from where they initially priced.

Related reading:

• IPO Market Insiders ‘Cautiously Optimistic’ That Current Trickle Will Get Stronger
• Astera Shares Soar Following IPO
• Reddit Shares Shoot Higher In First-Day Trading
• Is The IPO Market Back In Business?

Illustration: Dom Guzman

Rubrik is set to join the likes of chip startup Astera Labs, Walmart-backed Ibotta and online forum host Reddit as one of the bigger IPOs so far this year. Those IPOs came after last year’s second-half offerings by Arm Holdings, Instacart and Klaviyo helped thaw an IPO pipeline that had been frozen for nearly two years.

Now the question is whether that small trickle of companies will lead to a more steady stream as the second quarter moves into the third, and if highly anticipated companies like AI-enhanced data analytics company Databricks and fintech giant Stripe enter the market.

“I think people were cautiously optimistic that it would be a more robust IPO market coming into the year,” said John Hensley, partner in law firm Morrison & Foerster’s capital markets, and public company advisory and governance practices.

“I think we’re still cautiously optimistic,” he added.

Eyeing opportunity

Hensley said while there is demand for IPOs, there is not the “froth” there was in the market just a few years ago — when more than 350 venture-backed companies went public in the U.S.

“I can tell you our personal pipeline is enormous,” said Ross Carmel, a partner at securities law firm Sichenzia Ross Ference Carmel, as a lot of companies missed the 2021 window and are now eyeing this new window.

However, the IPO market has significantly changed since those free money days of 2021.

“I think we are definitely seeing a return to fundamentals” for companies looking to go public, Carmel said. “Investors want to see profitability, along with significant growth.”

The current startup facing the market has some of that. Rubrik’s subscription annual recurring revenue grew by 47% as of January, but it also had a net loss of $354 million for the year. Revenue grew modestly from $600 million a year ago to $628 million.

Many see Rubrik as a bellwether for the market, since some of its numbers may not be what investors are looking for in this market.

Gotta get over it

Even companies with many of the fundamentals investors want may have another issue to overcome as they eye the public market — frothy valuations left over from 2021.

Hensley said some companies that want to enter the IPO market have to come to terms with the fact that their valuations may be lower than just a few years ago.

That has already happened in the IPO market.

Grocery delivery service startup Instacart had to weigh that decision last year. In the salad days of 2021, the company has been valued at $39 billion. It slashed its value a couple of times before going public, but still had to take a significant haircut when it decided on an IPO price that valued it at $9.9 billion.

“The market likely can’t support those (2021) valuations,” Carmel said. “But at some point, you do need to offer liquidity to investors. It is very possible late-round investors may get burned.”

Another case in point when it comes to valuations is StubHub. Earlier this month it was reported the online ticket broker would test the market for a possible summer IPO. However, it is aiming for a $16.5 billion valuation or more — what it was valued at in late 2021 — which may lead the company to scuttle its offering if public appetite isn’t there.

AI IPOs

The fact StubHub is even eyeing the public market illustrates another characteristic of the current market — one industry is not dominating the IPO pipeline.

In the last nine months or so, the market has seen everything from a chip company to a grocery delivery service to a marketing email automation startup go public. There is not one specific tech sector that is seeing more IPO interest than another.

While AI seems to be the talk of the tech world, many of those companies are not yet mature enough to go public.

“I think you’ll see AI startup IPOs pick up next year,” Carmel said. “Not right now.”

Michael Marks, founding managing partner at San Francisco-based Celesta Capital and someone who invests in AI/ML startups, said even though many AI companies are too young to go public, they are creating excitement in the market and making people look closely at tech startup IPOs.

“For a while the IPO market has not been exciting,” he said. “But AI is a real thing.”

Marks said there could be an influx of AI startups looking at the public market as early as the first half of next year.

While there likely will only be a handful of winners among the large foundational generative AI companies, Marks said he is seeing significant interest in both hardware plays and how AI is applied to specific industries.

“There is a real appetite for these types of companies,” he said.

Looking ahead

Even as the IPO pipeline is thawing out, Hensley said many feel Q4 or even early 2025 may be more active.

“People are pointing to more activity in early 2025,” he said. “I really do hear that.”

Of course, just like anything in the market, such predictions could be easily derailed. Inflation and what effect that could have on interest rates could affect IPOs, as could any increase in the geopolitical tensions.

Nevertheless, Hensley said he expects the market will continue to see “fits and starts of deals” as the year moves along.

“There will continue to be windows of opportunities,” Carmel added. “There’s a robust pipeline right now.”

Related reading:

• Astera Shares Soar Following IPO
• A Look At Reddit’s Biggest Shareholders Ahead Of Its IPO
• Stablecoin Startup Circle Files Confidentially For IPO

Illustration: Dom Guzman

Altogether, venture funding in American and Canadian companies totaled $35.2 billion in Q1 of 2024, per Crunchbase data. That’s a gain of 14% from Q4, which was the slowest quarter in years.

But while funding was up sequentially, investment is still down year over year. Late-stage funding in particular remains well below year-ago levels, while early stage has held up better.

For perspective, we compared funding totals, color-coded by stage, over the past 13 quarters below.

While spending rose sequentially in Q1, deal volume did not. Per Crunchbase data, investors participated in 2,435 known rounds at all stages in the course of the quarter. That’s a decline of 8% from the prior quarter and 34% from year-ago levels, as charted below.

On the exit front, meanwhile, Q1 brought some renewed excitement to the moribund IPO market with well-received debuts of Reddit and Astera Labs. We also saw a few good-sized acquisitions.

Below we take a look at both investment and exit activity in more detail, breaking down totals by stage, looking at significant rounds, and tallying up largest M&A and public market exits.

Table of contents

• Late stage and technology growth
• Early stage
• Seed stage
• Exits
• IPOs
• M&A
• The big picture
• Methodology
• Glossary of funding terms

Late stage and technology growth

We’ll start with late-stage dealmaking, which still attracts more money than any other stage, even at the current, somewhat depressed levels.

Altogether, $19 billion went into late-stage and technology growth rounds in North America in Q1, per Crunchbase data. That’s a bit of an uptick from the prior quarter, but still well below year-ago levels, as shown in the chart below.

Deal counts also picked up a bit sequentially, with 265 late-stage and growth rounds reported for North American companies in Q1.

The totals got a boost from some extra-large financings for a handful of companies, including:

• San Francisco-based Generate Capital, a green infrastructure investor and operator, secured $1.5 billion in a January financing;
• New York-based Wonder, a startup that offers takeout and delivery from several restaurants cooked in a single kitchen, picked up $700 million in a March financing;
• San Francisco-based Lambda, a cloud-based GPU company, raised a $320 million Series C in February; and
• South San Francisco-based Alumis, a startup developing oral therapies for patients with immune-mediated diseases, landed $259 million in a March Series C.

But while jumbo-sized rounds did close over the course of the quarter, such deals remain far rarer than they were during the 2021 peak. Part of the reason is the highest-spending investors back then — SoftBank Vision Fund and Tiger Global Management — are much less active now.

Early stage

Activity in Q1 was pretty robust at early stage, boosted by big rounds for companies focused on biotech, artificial intelligence and climate tech.

Total early-stage funding for the just-ended quarter came in at $13.2 billion — surpassing the prior two quarters. Round counts ticked down a bit, as average investment size rose.

For perspective, we charted funding and round totals for the past five quarters below.

Investors also backed some unusually large rounds at Series A and Series B. Standouts included:

• Sunnyvale, California-based Figure, a developer of AI-enabled humanoid robots, snagged $675 million in Series B funding;
• San Diego-based Mirador Therapeutics, a startup focused on precision medicine for chronic inflammation and fibrotic disease, closed on $400 million in Series A funding; and
• Denver-based Koloma, a startup developing technology to extract naturally occurring hydrogen from underground deposits, dug up $246 million in Series B funding.

Seed stage

Seed investment saw the sharpest quarterly decline of any stage, according to preliminary Crunchbase data.

For Q1, a total of $3 billion went into reported seed, pre-seed and angel rounds. That’s a decline of 14% from the prior quarter and a drop of 23% from year-ago levels.

Round counts fell too. For the full picture, we chart out total funding and the number of deals for the past five quarters below.

Because some seed rounds are reported weeks or months after they close, we expect the Q1 total to rise a bit over time. However, it’s unlikely this will change the overall narrative of a down quarter.

Although most seed deals are in the single-digit millions, we did see a few extra-large financings. One of the largest from Q1 was for Alys Pharmaceuticals, an immuno-dermatology startup that launched with $100 million in initial funding. Other big rounds went to Antithesis, a provider of AI-enabled quality assurance software that picked up $47 million, and Blue Laser Fusion, which raised $37.5 million to work on laser fusion technology.

Exits

Of course, venture investors don’t only put money into startups. They expect to get returns when those companies mature and go public or get acquired.

As exit environments go, Q1 of 2024 wasn’t especially terrible. The IPO market opened up for a couple of splashy debuts, and acquirers wrote a few big checks, as detailed below.

IPOs

The IPO market, which has been very sluggish for months, picked up in March with the much-anticipated debuts of Reddit and Astera Labs.

Santa Clara, California-based Astera, a developer of data center connectivity technology with use cases in generative AI, made its splashy debut first on March 20. Shares soared in initial trading and continued to rise in the following days. Although off its peak, Astera recently had a market cap of more than $11 billion.

San Francisco-based Reddit, known for its lively online discussion forums, began trading two days after Astera. After surging in the early days of trading, shares sank a bit. Nonetheless, Reddit recently managed to maintain a market cap around $7.5 billion.

In addition to the two headlines, we also saw some smaller offerings by venture-backed companies including Kyverna Therapeutics, ArriVent Biopharma and FibroBiologics, which went public via direct listing.

M&A

Acquirers also announced agreements to buy a number of venture-backed companies. Although in most cases prices were not disclosed, a few were made public. Of these, the largest included:

• San Francisco-based OpenGov, a provider of software for government customers, agreed to sell a majority stake to existing shareholder Cox Enterprises at a $1.8 billion valuation;
• Private equity firm Francisco Partners agreed to acquire Portland, Oregon-based Jama Software, a provider of traceability tools, for $1.2 billion;
• GlaxoSmithKline is acquiring Aiolos Bio, a developer of therapies for patients with respiratory and inflammatory conditions, for $1 billion upfront and up to $400 million in milestone-based payments; and
• DraftKings agreed to acquire New York-based lottery app Jackpocket in a cash-and-stock deal valued at around $750 million.

The big picture

With Q1 now in the rearview mirror, it’s timely to consider what broad takeaways we can find in the data.

All in all, we’d say it wasn’t the most rollicking quarter. But there were a few indicators to bolster optimists’ case for a recovering startup investment climate.

For one, public investors showed there is appetite for large tech IPOs. And while we’ve seen better quarters for M&A, we saw that acquirers are still willing to write big checks.

Seeing early-stage investment continuing to rise over the course of several quarters also looks encouraging. Today’s hot early-stage companies, the hope is, will become tomorrow’s sought-after IPOs.

That said, the data wasn’t strong enough to support the idea that startup investment is back in a big way. Investment is still far, far below the peak. Getting back there, if it happens at all, will require a long, uphill climb.

Methodology

The data contained in this report comes directly from Crunchbase, and is based on reported data. Data reported is as of April 3, 2024.

Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter/year.

Please note that all funding values are given in U.S. dollars unless otherwise noted. Crunchbase converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to Crunchbase long after the event was announced, foreign currency transactions are converted at the historic spot price.

Glossary of funding terms

We have made a change to how we include corporate funding rounds in our reporting as of January 2023. Corporate rounds are only included if a company has raised an equity funding at seed through a venture series funding round.

Seed and angel consists of seed, pre-seed and angel rounds. Crunchbase also includes venture rounds of unknown series, equity crowdfunding and convertible notes at $3 million (USD or as-converted USD equivalent) or less.

Early-stage consists of Series A and Series B rounds, as well as other round types. Crunchbase includes venture rounds of unknown series, corporate venture and other rounds above $3 million, and those less than or equal to $15 million.

Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the “Series [Letter]” naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $15 million.

Technology growth is a private-equity round raised by a company that has previously raised a “venture” round. (So basically, any round from the previously defined stages.)

Illustration: Dom Guzman

For Augment, a new platform that launched in mid-2023 to connect buyers and sellers of shares in private companies, interest has been particularly hot in highly valued unicorns such as Rubrik, Databricks, SpaceX and Chainalysis.

We recently spoke with Augment co-founder Noel Moldvai. He encountered the secondary markets when he tried to sell his shares in Palo Alto, California-based cybersecurity startup Rubrik in 2020 after leaving the company to pursue other opportunities, and found the process of selling private company shares opaque.

Austin, Texas-based Augment competes with other secondary market trading platforms such as Forge, EquityZen and Hiive.

Moldvai said Augment aims for transparency by making the process of researching prices and buying and selling shares easily accessible in a single view.

“We are transparent and open,” Moldvai said in an email. “Anyone can log in, check out historical pricing based on bids/asks, mutual fund marks, and executed trades, place an order, negotiate directly with a counterparty, and execute a trade, all without actually talking to anyone. That’s the goal. We let the technology do the work.”

Unicorns most actively traded

The market for private shares has become more active again as many venture-backed companies have stayed private longer amid skyrocketing valuations for startups.

The Crunchbase Unicorn Board, a list of private companies ranked by their most recent valuations in a funding deal, now has more than 1,500 companies that are collectively valued at $5 trillion. In decades past, these lavishly funded startups would have gone public years before reaching such lofty valuations, but many of the unicorns on the list have remained private for years or even decades.

With a dearth of IPOs, especially in the past few years, interest in trading shares on the private secondary market has grown.

Moldvai said interest in a particular company on the Augment platform tends to increase ahead of an anticipated IPO, as employees might sell at a discount in order to get some guaranteed liquidity.

“Market dynamics tend to change a bit right before an IPO,” he said via email. “It’s usually employee sellers who need liquidity now to avoid the 6-month post-IPO lockup and investors who want to make a quick gain.”

That interest in pre-IPO companies is reflected in Augment’s list of most actively traded companies by order volume on its platform.

At the top of that list is Rubrik, which filed to go public on April 1. Social news site Reddit, which went public on March 21 at $34 per share, was trading around $30 a share in advance of its IPO, said Moldvai.

Around 80% of the activity on Augment is in just 30 companies, he said.

How it works

Companies are not always keen for employees to sell, Moldvai said, but the reality is there are paper millionaires living in studio apartments in San Francisco who want liquidity.

Secondary market transactions typically need to be approved by the company — which often have first refusal rights to purchase the stock — and can entail transfer fees.

Early-stage investors and solo GPs are also on the Augment platform looking to offload shares in companies, he said.

On the buy side, the Augment platform allows brokers to purchase on behalf of clients, often high-net-worth individuals seeking to own specific high-valued companies. Before the ability to access shares via the secondary markets, these clients could typically access a portfolio of private companies largely by investing in funds.

Augment is licensed as a broker-dealer and alternative trading system with FINRA and the U.S. Securities and Exchange Commission. It shows anonymous buyers and sellers one single view to allow for negotiation to take place. Buyers and sellers are verified on the platform. Once an agreement is made, there is a stock transfer notice sent to the company, which typically has a 30-day first right of refusal.

Trades on the Augment platform typically start at $100,000 for buyers and can be in the millions of dollars. Those minimum transaction values are due to the fees associated with transactions as well as fees to brokers executing trades on behalf of clients.

The platform is working on lowering the cost and minimum transaction size with new products and tech to streamline the process, Moldvai said. Following demand from accredited investors to purchase private company stocks at lower entry points, the company recently launched a new product called Collective that could allow buyers to purchase private company shares for as little as $5,000 by aggregating demand into a special-purpose vehicle for trades.

Related reading:

• Secondary Market Seeing Rebound After Slowdown

Illustration: Dom Guzman

The IPO is a long time coming for San Francisco-based Reddit. The company, known for its lively online communities and colorful discussion threads, was co-founded by CEO Steve Huffman and venture investor Alexis Ohanian more than 18 years ago.

Reddit’s initial public offering is being closely watched for a number of reasons. Its IPO is the first from a social media company since Pinterest’s debut in 2019. Startup investors and entrepreneurs are also hoping the IPO, which follows a prolonged drought for new tech offerings, could help kickstart the IPO market.

Certainly this has been an encouraging week for those hoping to pick up the IPO pace. A day before Reddit’s debut, Astera Labs, a developer of data center connectivity technology with use cases in generative AI, closed up more than 72% in first-day trading after pricing shares above the projected range.

Reddit, which is trading on NYSE under the ticker symbol RDDT, said it had an initial valuation of $6.4 billion after pricing shares at $34 each late Wednesday. Its valuation at the end of its first day of trading is around $7 billion.

Notably, in an unusual move, the company also offered 74,000 of its active moderators and users the opportunity to purchase stock at that price point, in order to give them access to some upside should the stock increase over time. Company CFO Drew Vollero told Axios that “tens of thousands” of Reddit users, known as Redditors, bought into the IPO.

“We set aside 8% of the shares so that our moderators and passionate users can be owners … It’s been good to have some pop for them on Day 1 because that’s different from what’s happened with some other companies,” he said.

Media company Advance Publications, owner of magazine publisher Condé Nast among other properties, was the largest shareholder in Reddit ahead of its IPO, with a 30.1% ownership of the company, according to securities filings. Several other shareholders, including Chinese tech conglomerate Tencent, Fidelity and entrepreneur and investor Sam Altman, (now CEO of OpenAI) also held large stakes.

— Gené Teare contributed to this article.

Illustration: Dom Guzman

Reddit’s IPO will be closely watched for a number of reasons. Its IPO is the first from a social media company since Pinterest’s debut in 2019. Startup investors and entrepreneurs are also hoping the IPO, which follows a prolonged drought for new tech offerings, could help kickstart the IPO market again. 

Reddit will trade on the NYSE under the ticker symbol RDDT. Its targeted share price is $31 to $34 at a value up to $6.4 billion upon listing. 

In an unusual move, the company is offering 74,000 of its active moderators and users the opportunity to purchase stock at the price set the day before the company goes public, in order to give them access to some upside should the stock increase over time.  

Reddit’s biggest shareholders

Reddit was founded in the summer of 2005, as part of the first Y Combinator accelerator class, alongside only eight other companies. 

It came about in the Web 2.0 era, a period defined by the birth of user-generated content platforms that also birthed Facebook (now Meta), Twitter (now X) and YouTube. 

Within 18 months of Reddit’s founding, media company Advance Publications, owner of magazine publisher Condé Nast among other properties, acquired the startup for $10 million. 

Advance remains the largest shareholder in Reddit, with a 30.1% ownership of the company, according to securities filings. 

Other leading shareholders include investors who have led fundings in Reddit since 2014: 

• Chinese tech conglomerate Tencent led Reddit’s Series D of $300 million in 2019 and now owns 11% of the company. 
• Fidelity led Reddit’s $420 million Series F, valued at $10 billion. The firm, which also invested in earlier rounds, now owns 9.5% of Reddit.
• Entrepreneur and investor Sam Altman, now CEO of OpenAI, led Reddit’s Series B of $50 million in 2014. His investment properties still own 8.7%, according to filings.
• Quiet Capital and Tacit Capital combined own 6.8% and first invested in the Series C round. 
• Vy Capital led Reddit’s Series E of $368 million in 2021 and now owns 5.1%. 

Venture firms Andreessen Horowitz and Sequoia Capital have also both invested in Reddit, but do not own more than 5%, according to filings. 

By the numbers: Funding, revenue and growth

Reddit has raised more than $1.3 billion from investors since its founding, according to Crunchbase.

Its 2023 revenues totaled $804 million, up 21% year over year, according to filings. On its IPO roadshow, the company indicated it expects to grow around the same proportion in 2024. A new revenue stream inked in January includes a $60 million a year deal for three years with Google to train AI models. 

On Friday, the company said in filings that the U.S. Federal Trade Commission has opened an inquiry into its AI data licensing business, which the company has said could bring in more than $200 million in revenue over the next few years.

Reddit hosts approximately 100,000 forums, called subreddits, on niche to broad topics, all managed by its community of users. The platform gained more mainstream attention for its r/wallstreetbets subreddit and that forum’s role in the “meme stock” phenomenon characterized by the GameStop trading flurry in 2021. 

The site had an average 73 million daily active users in the fourth quarter of 2023, up 27% over the previous year, according to its filings, and user growth has increased in the last two quarters. Still, the company has run at a loss each year.

Illustration: Dom Guzman

The Santa Clara, California-based company will offer nearly 14.8 million shares, while current stockholders will offer approximately 3 million shares, per its regulatory filing.

In total, the company aims to raise up to $534 million by selling shares priced between $27 and $30 each.

The target valuation would be an increase from the company’s last raise — a  $150 million Series D led by Fidelity Management and Research that valued the company at nearly $3.2 billion in late 2022. Other investors in Astera include Atreides Management, Intel Capital and Sutter Hill Ventures.

The company also raised a $50 million Series C — similarly led by Fidelity — that valued it at $950 million in September 2021.

AI and IPOs

Astera’s filing comes just as chip giant Nvidia seems poised to overtake Apple as the world’s second-most-valuable company. Demand for high-end chips has never been higher thanks to the current generative AI surge, which assuredly has something to do with Astera’s filing timing.

The startup provides data and memory connectivity solutions for some of the biggest chipmakers in the world, including Intel and Taiwan Semiconductor Manufacturing Corp. Its potential IPO would be a rare public-market exit for a chip startup.

Astera’s filing has been reported on for weeks and seems to lend more credence to the thought the IPO market could be thawing. Reddit started its pre-IPO roadshow this week, which followed public offerings last year from the likes of Arm Holdings and Instacart.

Related reading:

• Chipmaker Astera Labs Nabs $150M, Hits $3.1B Valuation
• Eye On AI: Despite Need, US-Based AI Chipmakers Not Seeing Investor Love

Illustration: Dom Guzman