India is one of the key markets where social media giant Reddit intends to focus on growing its user base, owing to its large internet population.
Reddit, which filed its IPO prospectus with the Securities and Exchange Commission on February 22, said it sees a massive opportunity to grow outside the United States and in languages beyond English.
"We are focused on growing Redditors (as Reddit users are called) in India, United Kingdom, France, Spain, Germany, and Brazil... They represent large populations as well as attractive advertising markets" the company said.
India is the largest market for social networking giant Meta, with its family of apps — Facebook, Instagram, and WhatsApp — boasting a combined user base of over a billion monthly users. Snapchat parent Snap Inc also counts India as one of its biggest markets outside the US.
Reddit said it had about 36.7 million international daily active unique users for the three months ended December 31, 2023, representing about 50 percent of its overall user base. The company didn't provide a breakdown of its user base for each country.
According to market research firm Statista, as of 2023, Reddit had over 25 million monthly active users in India.
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Reddit said that it plans to grow its base by offering users culturally relevant and location-specific content in these markets.
Currently, over 90 percent of all Reddit posts are in English. To accelerate its international growth, the social media platform said it has started translating its corpus of conversational data using translation models to multiple different languages.
"We also intend to use the Community Tab, machine-translated content, and highly relevant push notifications to help international users find and engage regularly with locally relevant and trending content," Reddit said in the IPO filing.
Regulatory concerns
That said, the social media platform has flagged Indian laws and regulations as one of its risk factors.
"The legislation in Germany and India has resulted in the past, and may result in the future, in the imposition of fines or other penalties for failure to comply with certain content removal, law enforcement cooperation, and disclosure obligations." it said.
"The governments of some countries, such as India and Pakistan, have passed laws and regulations restricting the distribution of content and products deemed to represent foreign or “immoral” influences", the filing read.
Reddit's IPO will be one of the first social media IPOs since Pinterest went public in 2019. It will also be the first major tech public offering in the United States this year.
Founded in 2005 by Alexis Ohanian and Steve Huffman, Reddit is a social news and discussion website with a large network of communities where people come and discuss their interests, hobbies and passions as well as various other topics, also referred to as subreddits.
The company posted revenue of $804 million in 2023, up 20 percent from the previous year. It reported a net loss of $90.8 million for the year, a marked improvement from $158.6 million loss in 2022.
Reddit had an average of 73.1 million daily active unique users and 267.5 million weekly active users for the three months ended December 31, 2023. It has more than 100,000 subreddits.
Among the firm's largest shareholders are Conde Nast parent company Advance Magazine Publishers (30.1 percent stake), Chinese tech giant Tencent (11 percent), and OpenAI chief executive Sam Altman (8.7 percent).
Altman was one of the earliest users of Reddit and served as its interim CEO for eight days in 2014. He was also a director on Reddit's board for seven years until 2022.
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