(Bloomberg) -- Reddit Inc. and its selling shareholders raised $748 million, pricing shares in an initial public offering at the top of a marketed range, the second big tech listing in as many days.

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The social media platform, along with its top executives and other employees, sold 22 million shares for $34 each, according to a statement confirming an earlier report by Bloomberg News. The shares were marketed in the IPO for $31 to $34.

At the IPO price, Reddit has a market value of $5.4 billion based on the outstanding shares listed in its filings with the US Securities and Exchange Commission. Including stock options and restricted share units, Reddit’s fully diluted valuation is closer to $6.4 billion. That’s down from $10 billion in a funding round in 2021, when Reddit first launched its IPO plans.

Reddit is a high-profile addition to 2024’s roster of newly and soon-to-be public companies. The biggest of those listings has been the $1.57 billion offering by Amer Sports Inc. in January.

The listing follows the $713 million Astera Labs Inc. offering by one day. Astera, a semiconductor connectivity company focused on artificial intelligence, priced its shares above its marketed range and then jumped 72% in its trading debut Wednesday.

Bloomberg News reported earlier Wednesday that Reddit and its shareholders were expecting the IPO to price at or above the top of the marketed range. The pricing of the shares was reported earlier by the Wall Street Journal.

Read More: Reddit, Shareholders Guide IPO Price at Top Range or Above

The IPO is being led by Morgan Stanley, Goldman Sachs Group Inc., JPMorgan Chase & Co. and Bank of America Corp., according to Reddit’s filings. Reddit’s shares are set to begin trading Thursday on the New York Stock Exchange under the symbol RDDT.

Two-Year Slog

San Francisco-based Reddit’s more than two-year slog to listing reflects the ups and downs of the market, beginning with its initial confidential filing in 2021, when IPOs on US exchanges set an all-time record of $339 billion, according to data compiled by Bloomberg. IPOs in the US have tumbled since then, reaching only $26 billion last year, the data show.

Reddit’s IPO tops big listings in September by US technology companies Instacart, which raised $660 million, and Klaviyo Inc., with a $659 million offering. While those IPOs, along with British chip designer Arm Holdings Plc’s $5.23 billion offering — 2023’s biggest — failed to launch a listings rush, the market has warmed since then.

This year, almost $8.7 billion has now been raised via IPOs on US exchanges, the data show. That’s an increase of about 150% at this point last year.

The strong showings by Reddit and Astera provide a market temperature check for other IPO candidates such as Microsoft Corp.-backed data security startup Rubrik Inc. and health-care payments company Waystar Technologies Inc.

Losses Shrinking

Founded in 2005, Reddit averaged 73.1 million daily active unique visitors in the fourth quarter, according to its filings. The company reported a net loss of $91 million on revenue of $804 million in 2023, compared with a net loss of about $159 million on revenue of $667 million a year earlier.

About 8% of the IPO shares are being set aside for Reddit users and moderators who created accounts before Jan. 1, as well as some board members and friends and family of some employees and directors. Those shares won’t be subject to a lockup, meaning the owners can sell them on the opening day of trading, according to Reddit’s filings.

Read More: Seven Things to Know About Reddit’s Unusual IPO

Reddit’s largest shareholder is Advance Magazine Publishers Inc., part of the Newhouse family publishing empire that owns Conde Nast, which bought Reddit in 2006 and spun it out in 2011.

Reddit said its millions of loyal users and moderators pose risks as well as a benefit for the company. Redditors have a historically combative relationship with the site, launching revolts over everything from racism on the platform to executives’ staffing decisions.

Shorting Plan

Thousands of members of the WallStreetBets forum — which boasts around 15 million users and helped popularize meme stocks like GameStop Corp. — voted to boost a forum post about shorting Reddit’s stock when it begins trading. Their reasons varied from the company’s lack of profitability to competitive concerns.

Reddit co-founder and Chief Executive Officer Steve Huffman said in a signed letter included in the filings that the company has many opportunities to grow both the platform and the business.

“Advertising is our first business, and advertisers of all sizes have discovered that Reddit is a great place to find high-intent customers that they aren’t able to reach elsewhere,” Huffman said. “Advertising on Reddit is rapidly evolving, and we are still in the early phases of growing this business.”

AI Licensing

Reddit said it’s in the early stages of allowing third parties to license access to data on the platform, including to train artificial intelligence models. The company said that in January it entered into data licensing arrangements with an aggregate contract value of $203 million and terms ranging from two to three years. It expects a minimum of $66.4 million of revenue from those agreements this year, according to the filings.

Reddit also has announced a deal with Alphabet Inc.’s Google, allowing Google’s AI products to use Reddit data to improve their technology. Large language models often need vast troves of human-generated content to improve.

Huffman owns shares that will give him 3.3% of the voting power after the offering. That includes Class B shares that will have 10 votes each compared with one each for the Class A shares to be sold in the IPO, the filings show. Huffman also has a voting proxy agreement with Advance.

Other large shareholders include Chief Operating Officer Jennifer Wong, as well as FMR LLC and entities affiliated with OpenAI Chief Executive Officer Sam Altman, Tencent Holdings Ltd., Vy Capital and Quiet Capital and Tacit Capital, according to the filings.

In all, Huffman and those investors will hold about three-quarters of the shareholder voting rights after the IPO.

Huffman’s fellow co-founder, venture capitalist Alexis Ohanian, isn’t listed among the investors with stakes of 5% or more and isn’t named elsewhere in the filings.

--With assistance from Priya Anand.

(Updates with statement in second paragraph)

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