Reddit Names Its First Finance Chief as It Prepares for Public Listing

Reddit is in the early stages of exploring a public offering, but doesn’t yet have a timeline for doing so, said Steve Huffman, the company’s co-founder and chief executive. Mr. Vollero, who served as Snap’s CFO during its 2017 public listing, will help Reddit prepare by building out the company’s finance function and internal controls.

“Being a public company might just be a better fit for Reddit generally, in the sense that our users feel a real sense of ownership over their communities,” Mr. Huffman said, referring to the passion of the platform’s users. “It would be fitting if the ownership that our users felt—if they had the opportunity for that to be actual ownership in Reddit.”

In his new role, Mr. Vollero will be responsible for building out Reddit’s finance function across several areas. Mr. Vollero said his immediate priority will be to hire staff for the company’s tax, treasury audit and procurement divisions. He also will focus on improving the accuracy of the company’s forecasting, reducing the time it takes to close the books and improving internal controls.

“That is really where we’re going to be focused—the people, processes and systems to give ourselves the optionality if we want to go public,” Mr. Vollero said.

The volume of initial public offerings, particularly from technology companies, has increased over the past year. Share prices for companies such as Airbnb Inc. and DoorDash Inc., which both went public in late 2020, soared following their market debuts. Some technology companies have used alternative routes to the public markets, including direct listings or mergers with special-purpose acquisition companies.

Reddit still needs to evaluate the best IPO route for the company, Mr. Huffman said.

Late-stage startups often bring in finance chiefs with IPO experience to build out the team and accounting systems required to become a public company, said Josh Baskins, a principal at the recruiting firm Lancor, who focuses on the technology sector. “There is a lot of team building that takes place in the 12 to 24 months before a company goes public,” he said.

Reddit, which was founded in 2005, last month said it raised $250 million and doubled its valuation to $6 billion in a late-stage funding round led by venture-capital firm Vy Capital. The company, which was previously valued at $3 billion, also counts venture firm Andreessen Horowitz and Tencent Holdings Ltd. among its investors.

Reddit has gained attention in recent weeks as users of its WallStreetBets community forum encouraged each other to purchase the shares of heavily shorted stocks, such as GameStop Corp. and AMC Entertainment Holdings Inc. The company has said the episode helped it attract new advertisers and bring back lapsed ones. It said Friday it currently has about 52 million daily active users.

In particular, the frenzy surrounding WallStreetBets helped Reddit attract advertisers in the financial technology sector that provide brokerage services, Mr. Huffman said. Advertising revenue increased 90% during the fourth quarter compared with a year earlier, the company said Friday. It declined to disclose a specific dollar figure.

Reddit in December acquired Dubsmash, a free app for creating user-generated videos. Reddit expects the app, which brings with it a younger audience and content such as dance videos, to generate advertising revenue over time. Other major tech companies, including Facebook Inc.’s Instagram and Snapchat, have introduced similar product offerings following the success of ByteDance Ltd.’s TikTok.

Reddit isn’t turning a profit currently. Mr. Huffman said the company, as it explores an IPO, is focused on demonstrating the strength of its business to future investors, including by expanding its video offerings and growing internationally.

“That doesn’t necessarily mean profitable on day one, but I think it does mean we have to show a path to get there that is believable,” Mr. Huffman said.

Write to Kristin Broughton at [email protected]