has received feedback suggesting that it should consider a valuation of at least $5 billion, according to sources familiar with the matter. The San Francisco-based social media company and its advisers are aiming for a mid-single-digit billion valuation, although the final figure will depend on the state of the IPO market's recovery. Reddit is currently contemplating a possible IPO listing in March, these sources revealed.

Private trades of Reddit's unlisted shares have indicated a lower valuation for the company, falling below the $5 billion mark. Potential buyers on Rainmaker Securities' platform have submitted bids suggesting a value between $4.5 billion and $4.8 billion. Similarly, Forge Global Holdings Inc.'s database data implies a $4.8 billion valuation based on secondary activity. It's worth noting that private shares tend to have a lower valuation compared to IPO listings due to their relatively illiquid nature.

Although deliberations surrounding the IPO are ongoing, both the valuation target and timing are subject to change, indicating that Reddit and its advisers are carefully evaluating market conditions. A spokesperson for Reddit declined to comment on the matter.

The valuation considerations made by Reddit highlight the broader retreat of the tech sector from the soaring valuations experienced during the private funding boom in 2021. Bloomberg News reported in 2022 that Reddit raised funds at a $10 billion valuation that year, and could have potentially reached $15 billion in an IPO. However, the market for first-time share sales came to a halt, resulting in tech giants initiating rounds of layoffs and companies that did go public being valued lower than their private funding rounds.

For instance, Instacart, which reached a peak valuation of $39 billion in March 2021, debuted in September 2023 at a valuation of $9.9 billion. As of Friday, the company currently holds a market value of approximately $7.1 billion.

Founded in 2005, Reddit has gained significant prominence, particularly during the meme-stock era, when its WallStreetBets forum caused a stir in the stock market. The frenzied trading activity of 2021, largely fueled by Reddit users' posts, led to sharp price fluctuations in companies like GameStop Corp. and AMC Entertainment Holdings Inc.

As Reddit navigates the path toward its IPO, its valuation and timing decisions will be closely watched, reflecting the continued impact of market volatility on the tech sector.