The success of the IPO is contingent in part on the state of the IPO market, which has struggled in recent years. Reddit’s valuation is estimated below the $5 billion figure in private markets, Bloomberg reported. When Reddit first began preparing to go public in late 2021 — a record-breaking year for venture capital — some thought the company could be valued as high as $15 billion in an IPO.

Investors are hoping that 2024 will be a more active year for the IPO market. IPOs began showing signs of life again last year as profitable tech startups like Instacart and Klaviyo filed to go public. This year’s IPO market may also be helped by the Fed’s promised rate cuts and a weak M&A market. The last time a social media company went public was in 2019. That was Pinterest, and it was valued at $10 billion.

Reddit’s current target shows that those days of sky-high valuations are gone, for now. Reddit declined Business Insider’s request for further comment.

Reddit, which some have dubbed “the front page of the internet,” was launched in 2005 by University of Virginia roommates Steve Huffman, Alexis Ohanian, and Aaron Swartz.

A year later, it became one of the biggest sites in the world in terms of unique visitors. The founders then sold it to Condé Nast for just $10 million. Ohanian went on to launch venture firms Initialized Capital and Seven Seven Six, but Huffman stayed close to the company and has been CEO since 2015 — seeing it through an explosive period of growth during the pandemic, when it birthed the meme-stock craze.

Still, even Huffman is shocked by how far Reddit has come since its launch. He once said the business felt like a “homework assignment that got out of hand.”