Reddit Sales Growth Slowdown Preceded Fight Over New API Fees

A stark business reality faced Reddit before a user uprising engulfed its site this month: slowing sales growth. From a report: Reddit's revenue rose 38% in 2022 to about $670 million last year, two people familiar with the matter said, faster than many other internet ad firms but a steep slowdown from the more than doubling of revenue the company experienced in 2021 over 2020. The slowdown adds to uncertainty about Reddit's hopes of going public. It comes in the wake of a highly public battle between Reddit and third-party apps that connect to Reddit and are popular with users and moderators. The battle has highlighted the challenges for many internet firms that rely on content from users but are trying to build profit-making businesses. And the 2022 sales figure, which hasn't been previously reported, suggests Reddit would face a significant valuation haircut from its last private round if public investors valued it similarly to peer companies. The 2022 revenue multiple at which Snap and Meta Platforms are trading suggests Reddit is worth just over $3.3 billion. That's about one-third the value private investors put on the company less than two years ago, when Reddit last raised money.

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