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SENSOR TOWER · ABRAHAM YOUSEF · FEBRUARY 2024
Reddit’s IPO Journey To Be Driven By Communities, Content, and Capital
Reddit’s upcoming public listing will be the first social media company IPO since 2019. Sensor Tower data shows that the platform has posted solid mid-teens YoY growth in mobile app DAUs over the past few years, which was directionally in line with the company’s reported DAUqs. Additionally, ST data shows that the US is Reddit’s largest and most highly engaged market, likely driven by the breadth and depth of available content as ~90% of all posts are in English. However, on a global basis, Reddit lags its social media peers in both the size of its user base and levels of engagement amongst its users.
Key Takeaways:
Sensor Tower mobile app DAUs for the Reddit app have historically correlated quite well with the company’s reported logged-in DAUqs, boasting a .98 correlation coefficient on both a worldwide and US-only basis from 1Q21-4Q23. Reddit global mobile app DAUs increased an average of 11% YoY, per quarter, from 1Q23-4Q23, vs 17% for Reddit’s reported worldwide logged-in DAUqs
ST data shows that roughly half (50%) of Reddit’s DAUs in 4Q23 were from outside of the US, in line with company commentary. Reddit mobile app DAUs from outside of the US increased 14% YoY in 4Q23, directionally in line with reported international DAUqs (+21% YoY)
Per ST data, the US is Reddit’s most highly engaged market, with users in Dec’23 registering an average of 30 mins/day on the app vs Southeast Asia (21 mins/day), LatAm (20 mins/day) and Japan (18 mins/day), potentially driven by the fact that ~90% of all Reddit posts are in English
Sensor Tower’s proprietary mobile app panel data shows that Reddit’s content is a vital component to its success as US Reddit app users spent the majority (52%) of their time on post detail pages (actual Reddit posts), while the main feed (26%), subreddits (7%), and others such as video feed, profile, chat, and search made up the rest (15%). Measuring the distribution of time spent across various in-app features will prove pivotal to assessing Reddit’s future advertising capabilities and effectiveness per surface
ST data shows that Reddit has the lowest levels of user engagement and highest levels of user churn amongst its social media peers. In 4Q23, worldwide Instagram, TikTok, and Facebook users (each) spent 100x more hours engaged per day on these platforms than on Reddit. Additionally, Reddit had the lowest percentage of every day users, which are often the stickiest users of a platform. In 4Q23, only 7% of Reddit users opened the app every day, vs X (18%), Snapchat (25%), Facebook (30%), TikTok (32%), and Instagram (43%)
For more information, request the full report from reports@sensortower.com.
Written by: Abraham Yousef, Senior Insights Analyst
Date: February 2024