Reddit

Liquidity Case Study 2024

IPO, March 2024

Liquidity Event

21 Months

Time to Liquidity

36%

Net IRR*

1.65x

Net MOIC**
Figures represent the median Equitybee investor

About Reddit IPO

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.

Reddit investment with Equitybee

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.

How did returns through Equitybee perform compared to leading VCs?

Equitybee investors have achieved impressive returns that exceed those of leading venture firms participating in Reddit's Series E and Series F funding rounds, including top players like Andreessen Horowitz and investment firms such as Fidelity.

Broad Access
By funding startup employees stock options, Equitybee provide investors with access to virtually any pre-IPO company.
Discounted Entry Price
By investing through employees stock options funding, investors can gain access to late stage companies based on earlier lower valuation.

Earlier Valuations, Faster Liquidity

Equitybee Investors

E Series Investors
F Series Investors

Equitybee Investors

E Series Investors
F Series Investors
Entry Price
$15.77 (Median)
$42.47
$61.79
Net IRR
36%
7%
-5%
Months to Liquidity
21.0 Months
41.5 Months
35.9 Months
*Fundraising round information sourced via Pitchbook, Inc.

Investment Entry Prices vs. Net IRR

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).

Investments Breakdown

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 ROIFunded DateOffer PriceInterestShare Incentive %Distribution DateSettlement Price
Offer #11.44x12%44%6/22/2021$10.54391%10%9/12/2024$53.75
Offer #21.21x7%21%10/28/2021$10.36881%5%10/21/2024$53.75
Offer #31.45x15%45%12/21/2021$16.36482%15%8/29/2024$53.75
Offer #41.29x10%29%1/11/2022$15.17352%9%10/11/2024$53.75
Offer #51.7x27%70%6/29/2022$21.28643%30%10/2/2024$53.75
Offer #61.58x28%58%11/2/2022$29.52343%35%8/29/2024$53.75
Offer #71.83x44%83%1/9/2023$17.47153%30%9/10/2024$53.75
Offer #81.83x51%83%3/22/2023$17.27203%30%9/10/2024$53.75
Offer #91.92x61%92%4/26/2023$13.06403%25%9/5/2024$53.75
Offer #101.66x51%66%6/14/2023$14.40323%20%9/5/2024$53.75
Offer #111.93x84%93%9/1/2023$20.51764%40%10/1/2024$53.75
Offer #121.63x63%63%11/15/2023$14.74663%20%10/28/2024$53.75

*Median Multiple on Invested Capital

**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. Investments were made between 6/22/2021 and 11/15/2023. Net IRR is shown net of all applicable fees. 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 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 the invested 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.

From Investment to Liquidity

Timeline Of Events

Feb 2021
Reddit Completes Series E
Jun 2021
Offer #1 Funded

Aug 2021
Reddit Completes Series F
Oct 2021 - Nov 2023
Offers #2 - 12 Funded

Mar 2024
Reddit Initial Public Offering (IPO)
Aug 2024
Distribution to investors started
Funding Amount |
$367.95M
Post Money Valuation |
$5.89B
Lead investor |
Vy Capital
The first Reddit employee offer was funded through Equitybee.
Funding Amount |
$410M
Post Money Valuation |
$10B
Lead investor |
Fidelity Investments
Equitybee funded 11 additional employee offers
IPO Date |
March 21, 2024
IPO Price |
$34
Closing Price |
$50.44
Closing Market Cap |
$9.5B
Distribution
On August 9, 2024, the six-month lockup period following Reddit’s IPO ended, triggering settling investments made into Reddit employee offers via Equitybee.

Fundraising round information sourced via Pitchbook, Inc.

From Investment to Liquidity

Timeline Of Events

Feb 2021
Reddit Completes Series E
Funding Amount
$367.95M
Post Money Valuation
$5.89B
Lead investor
Vy Capital
Jun 2021
Offer #1 Funded

The first Reddit employee offer was funded through Equitybee.
Aug 2021
Reddit Completes Series F
Funding Amount
$410M
Post Money Valuation
$10B
Lead investor
Fidelity Investments
Oct 2021 - Nov 2023
Offers #2 - 12 Funded

Equitybee funded 11 additional employee offers.
Mar 2024
Reddit Initial Public Offering (IPO)
IPO Date
March 21, 2024
IPO Price
$34
Closing Price
$50.44
Closing Market Cap
$9.5B
Aug 2024
Distribution to investors started
On August 9, 2024, the six-month lockup period following Reddit’s IPO ended, triggering settling investments made into Reddit employee offers via Equitybee.

Fundraising round information sourced via Pitchbook, Inc.

Equitybee Investors Returns

IPO, March 2024

Liquidity Event

21 Months

Time to Liquidity

36%

Net IRR*

1.65x

Net MOIC**
Figures represent the median Equitybee investor

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750+
Startups
Equitybee investors have funded employee stock options in over 750 pre-IPO companies
202
Liquidity events
Equitybee investors have benefited from 202 unique liquidity events for 151 different companies
37%
Realized net IRR
The average internal rate of return, net of fees, for investments that achieved liquidity was 37% and 70% ROI
3,500+
Active customers
Over 3,500 investors and startup employees working together to fund stock options and provide liquidity.
23.7
Avg # of months to liquidity
For investments that reached liquidity, the average time to return was 23.7 months
77.6%
Median discount
Equitybee investors enjoyed an entry price that saw a median discount of 77.6% based on the most recent share price paid by investors on the cap table

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.