Reddit is a social news aggregation and discussion network based in the United States. On March 21, 2024, Reddit went public with an initial offering price of $34 per share. By the end of its first trading day, Reddit’s share price closed at $50.44 per share, resulting in a valuation of $9.5 billion and marking the biggest tech IPO of that year.
From 2021 to late 2023, Equitybee facilitated the funding of twelve Reddit employees’ stock options packages. A few months after the last employee was funded, Reddit successfully went public via IPO, delivering positive returns to all investors.
The chart below highlights the net internal rate of return (IRR) for Equitybee Offers 1 - 12 in addition to the hypothetical outcomes of investors who participated in Reddit’s Series E and F fundraising rounds. We were able to estimate the IRR for both Series E and F investors based on (1) their respective preferred share prices paid within each fundraising round (as outlined in the Timeline of Events section below), (2) the closing share price on the day the IPO lockup period expired, and (3) a 1:1 conversion ratio from preferred to common shares upon IPO. Notably, the median net IRR generated by Equitybee Offers 1 - 12 was 36%, while investors who participated in Reddit’s Series E and F fundraising rounds ended up experiencing lackluster IRRs (7% and -5%, respectively, according to our estimates).
The table below showcases the returns yielded by all Reddit offers via Equitybee after Reddit’s IPO lockup period expired.
| Offer # | Net MOIC* | Net IRR** | Net ROI | Funded Date | Offer Price | Interest | Share Incentive % | Distribution Date | Settlement Price |
|---|---|---|---|---|---|---|---|---|---|
| Offer #1 | 1.44x | 12% | 44% | 6/22/2021 | $10.5439 | 1% | 10% | 9/12/2024 | $53.75 |
| Offer #2 | 1.21x | 7% | 21% | 10/28/2021 | $10.3688 | 1% | 5% | 10/21/2024 | $53.75 |
| Offer #3 | 1.45x | 15% | 45% | 12/21/2021 | $16.3648 | 2% | 15% | 8/29/2024 | $53.75 |
| Offer #4 | 1.29x | 10% | 29% | 1/11/2022 | $15.1735 | 2% | 9% | 10/11/2024 | $53.75 |
| Offer #5 | 1.7x | 27% | 70% | 6/29/2022 | $21.2864 | 3% | 30% | 10/2/2024 | $53.75 |
| Offer #6 | 1.58x | 28% | 58% | 11/2/2022 | $29.5234 | 3% | 35% | 8/29/2024 | $53.75 |
| Offer #7 | 1.83x | 44% | 83% | 1/9/2023 | $17.4715 | 3% | 30% | 9/10/2024 | $53.75 |
| Offer #8 | 1.83x | 51% | 83% | 3/22/2023 | $17.2720 | 3% | 30% | 9/10/2024 | $53.75 |
| Offer #9 | 1.92x | 61% | 92% | 4/26/2023 | $13.0640 | 3% | 25% | 9/5/2024 | $53.75 |
| Offer #10 | 1.66x | 51% | 66% | 6/14/2023 | $14.4032 | 3% | 20% | 9/5/2024 | $53.75 |
| Offer #11 | 1.93x | 84% | 93% | 9/1/2023 | $20.5176 | 4% | 40% | 10/1/2024 | $53.75 |
| Offer #12 | 1.63x | 63% | 63% | 11/15/2023 | $14.7466 | 3% | 20% | 10/28/2024 | $53.75 |
*Multiple on Invested Capital
**Internal Rate of Return, net of fees
Past performance is not indicative of future results. 36% IRR represents the median IRR experienced by investors who utilized Equitybee to fund the 12 employee stock options in Reddit. Offers were funded between 6/22/2021 and 11/15/2023. Net IRR is shown net of all applicable fees. IRR figures are calculated for each offer on the Equitybee platform from the date the investor's funds were transferred to the employee (funded date) through the distribution date of proceeds.. If the distribution date was less than one year after the funded date, the IRR represents an unannualized return. For distributions one year or more after the funded date, IRR is annualized
Reddit public share prices sourced through Yahoo! Finance. Equitybee is not affiliated or associated with, or endorsed by, any of the companies mentioned herein. Equitybee executes private financing contracts (PFCs), private placements which are speculative, illiquid, contain substantial risk and may result in the complete loss of capital to the investor. These risks may be greater during extreme market conditions. PFCs do not grant or transfer ownership of startup company stock. When a liquidity event occurs at a price per share less than the investment price per share, Investors will first receive all available funds to recoup the original investment amount. The employee will not receive any proceeds in this event. A private offering of interests will only be made pursuant to a confidential private placement memorandum, an operating agreement, and other subscription documents (“Other Documents”), which will only be furnished to qualified investors on a confidential basis at their request for their consideration in connection with such offering. For accredited investors only. Securities offered through EquityBee Securities, LLC, member FINRA.
Fundraising round information sourced via Pitchbook, Inc.
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Past performance is not indicative of future results. 37% net IRR represents all fully realized investments across the Equitybee platform, including US and Israel markets. Investors should be aware that these returns were primarily achieved during favorable market conditions. Results based on offers from June 2018 through July 2024. Net IRR is shown net of all applicable fees for the respective market. This performance data does not represent any investor’s portfolio or any model portfolio. IRR figures are calculated for each transaction into an offer on the Equitybee platform from the date the investor's funds were received through the distribution date of proceeds, if any. If the distribution date was less than one year after the invested date, the IRR represents an unannualized return. For distributions one year or more after invested date, IRR is annualized. Data quoted excludes partial returns of invested capital, e.g., tender offers for a portion of covered securities, and investments which have not experienced a liquidity event. As of July 31, 2024 approximately $108M million has been invested on the Equitybee platform; 17.9% of invested capital has experienced a fully realized return, 82.1% of invested capital is unrealized or partially realized.