Diem Co-Founders Emma Bates (CEO) and Divia Singh (COO)

Female-founded startup Diem wants to be the go-to social search engine for women and nonbinary folks

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Diem Co-Founders Emma Bates (CEO) and Divia Singh (COO)

Image Credits: Diem

A startup called Diem wants to tackle the problem of “search engine gender bias,” where results can produce default male information, making many women feel unsatisfied by the answers they receive to taboo or personal questions online. The company’s social search engine aims to provide a space for women and nonbinary individuals to share personal stories and ask questions about various topics, including sexual health, relationship problems, mental health, body positivity and more.

Available as a web app and on iOS and Android devices, Diem is designed to feel like a giant group chat with people around the world, where users can speak about things that they would normally tell their closest friends, like getting out of a toxic relationship, managing period symptoms or dealing with unhealthy body image. There’s even an option to ask questions anonymously.

The app also has an AI component where answers are pulled from reputable sources on the internet and, with the use of ChatGPT and Diem user-contributed content, summarized through “a feminine lens,” the startup claims.

The company recently launched a slew of features, including a referral tool called “Nominate Your Friends,” where users invite friends to participate in questions; “Spaces,” or micro-communities centered around interests (similar to subreddits); and “Daily Briefing,” a personalized selection of 10 daily posts.

Diem also recently partnered with verified content providers so users can get information from trusted sources. The first four companies are experts in the reproductive health space, including hormone health startup Aavia, sexual telehealth clinic Hey Jane, vaginal health startup Evvy and female health brand Stix. Diem’s AI can now pull up related articles directly from websites to answer a question. Diem will partner with more content providers in the coming months, including companies specializing in finance and relationships.

Image Credits: Diem

With the new nomination tool, users can directly share a question with a friend to weigh in on the conversation. In the future, users will be able to nominate community members who already have a Diem account. The “Nominate Your Friends” feature is also a way for Diem to grow its user base since users send their friends a link to the question, requiring them to sign up to the platform before answering. Diem currently has more than 40,000 users, we’re told.

Spaces is a new beta feature designed to help members feel comfortable sharing important topics and common interests with others while overall getting closer to people in the Diem community. Six spaces are available, run by community members and inspired by popular posts on the platform. For instance, “Is This Normal,” “No Judgment Pls,” “SOS,” “Hidden History,” “Big Sis Advice” and “Ask Me Anything.” The feature is set to officially launch in a few weeks, and Diem will roll out a new space each month. The platform also plans to allow influencers to run some of the spaces as well.

Additionally, Diem plans to introduce two more features this month, such as “Recommended Reading,” an AI-powered recommendation feature for users to discover and discuss trending news articles, and an event feature for users to host in-person events with other members of the community. The event feature is an expansion of its insider program called the Diem Society, an exclusive community of users who engage in monthly chats to foster a deeper experience within the platform.

While the company declined to share specific details, it’s planning a monetization feature to pay users for their content contributions.

Image Credits: Diem

Diem was founded by Emma Bates (CEO) and Divia Singh (COO) after Bates had to take the morning-after pill.

“I ended up in this classic internet doom spiral, trying to query others’ experiences and find their stories,” Bates said in a TechCrunch interview. “My search experience felt in direct contrast to the real-world information sharing that exists over dinner tables, in private group chats, in the bathroom at a nightclub… I think that there are so many moments in which we lean on each other to decipher the world around us or the experiences we may be having. And there’s no real place that captures all that information and makes it a resource for everyone.”

Bates and Singh previously worked at DTC travel brand Away.

The company has raised $3.7 million in total, with Stellation Capital leading its most recent seed round. Other investors include Acrew Capital, Flybridge, Techstars and XFactor Ventures, along with angels Lindsay Kaplan, co-founder of Chief; Steph Korey, co-founder of Away; Jaclyn Johnson, founder of Create & Cultivate; Amber Atherton, an early-stage investor; and Abadesi Osunsade, founder of Hustle Crew.

Reddit files to go public at last

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Reddit logo displayed on smartphone with Reddit logo in the background

Image Credits: Shutterstock

Social media giant Reddit filed to go public today. Its long-awaited S-1 filing will see it approach the public markets potentially at the head of a long column of richly valued technology startups and private companies that need to find an exit this year.

The timing of Reddit’s IPO is not a surprise.

The company’s got a long and tangled history. It was sold in its infancy, only to be later spun back out. Today Reddit approaches the public markets with more than $800 million worth of revenue in 2023, up from $666.7 million in 2022.

However, the company remains unprofitable on both a GAAP and adjusted basis, and continues to consume cash to fund its operations. Scale has not yet solved the profitability question for Reddit, which could limit its potential valuation when it does list its shares.

In 2022, Reddit generated a net loss of $158.6 million and had an adjusted EBITDA of negative $108.4 million. In 2023, those figures improved to a $90.8 million net loss and $69.3 million worth of negative adjusted EBITDA. The company’s free cash flow improved from –$100.3 million to –$84.8 million over the same timeframe.

The company may be making progress toward stemming the red ink that is missed in its annual figures. In the final quarter of 2023, Reddit not only posted what was at least a local maximum in revenue terms — $249.8 million — but also a net profit of $18.5 million. While the GAAP profit is notable for the fourth quarter, the company’s free cash flow was still negative in the period, ending the three-month period at –$22 million.

Reddit raised more than $1 billion while private, according to Crunchbase data. That figure includes a massive $410 million Series F raised in 2021 and a smaller $368 million Series E raised earlier the same year. The Series E pushed Reddit’s valuation to $6.4 billion, while its Series F took it to a roughly $10 billion valuation.

Both of those bubble-era valuations will be tested in Reddit’s now quickly forthcoming IPO. But the company’s debut will be more than a test for certain private-market startup valuations. Reddit is reportedly trying something novel in its own flotation.

An IPO with a twist

In what is broadly viewed as an unorthodox move, Reddit reportedly plans to reserve an undetermined number of shares for 75,000 of its users, according to the Wall Street Journal, which cited people familiar with the matter. Those users will be given the chance to scoop up shares of Reddit at its IPO price before the stock even begins trading — something typically reserved only for large investors.

Tailwinds

Reddit’s IPO filing comes at an auspicious time. Reuters reported that Reddit has reached a deal with Google to allow the search giant to use its data. The publication pipped the deal’s value at around $60 million per year. That makes it worth roughly 7.5% of its 2023 revenue, a very nice tailwind for its 2024 results.

If Reddit is able to secure similar deals with other major AI model providers like OpenAI, it could see its revenue base expand from new sources this year in a manner that could undergird its first few quarters’ results as a public company.

Reddit is known to be a key source of data for LLMs, which could give the social media company a way to monetize from the current AI wave at very high gross margins.

In its S-1 filing, the company said that it is in the early stages of giving third parties the ability to “license access to search, analyze, and display historical and real-time data from our platform.” Investors love a growth story, and Reddit has a fresh revenue plank to crow about as it embarks on its eventual roadshow.

The investor pitch

The popular site is impressively growing its user base. The number of global daily active users (DAUs) climbed 27% in the three-month period ended December 31, 2023. For a site that has existed for a decade, that’s a significant achievement. Specifically, according to the filing, Reddit had more than 500 million visitors in December 2023 alone and an average of 73.1 million daily active unique users globally in the three months ended December 31.

Looking ahead, Reddit believes it still has plenty of opportunity to grow revenue through advertising. Unsurprisingly, it claims to be in the “early stages” of using machine learning and prediction models to “better match supply and demand and deliver return on investment” for its advertisers. Examples of that include using prediction models to do things like help better predict conversion rates of an ad.

Advertising revenues in the technology world have recovered to a degree, with companies like Meta and Amazon that sport massive ad incomes reporting earnings that included growth in that area of their larger business. After some time in the doldrums, the tides of the economy could be tilting back in Reddit’s favor.

Reddit wants to parlay its user growth into advertiser revenue growth. It ambitiously estimates that its total addressable market globally from advertising alone, not including China and Russia, to be a whopping $1.4 trillion. It’s talking specifically about desktop and mobile web, display, video and social direct response ads, in addition to search advertising.

Reddit is not an enterprise SaaS business, so it has a different business model than much of startup land. But if it does manage to price its IPO well and put up some strong early trading results, it could help nudge some other late-stage, private-market tech companies off the sidelines and into the IPO chute. Not only would that make your friendly local venture capital reporters happy, as we love the data that IPO filings bring to us as much as we love oxygen, a surge in public-market liquidity would also be a boon to venture investors long sitting on paper returns that they would love to convert to cash.

"License" on a screen.

Redis switches licenses, acquires Speedb to go beyond its core in-memory database

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"License" on a screen.

Image Credits: PashaIgnatov / Getty Images

Redis, the popular in-memory data store, is switching away from the open source three-clause BSD license. Instead, in a move that is clearly aimed to prevent the large cloud providers from offering free alternatives to Redis’ own hosted services, Redis will now be dual-licensed under the Redis Source Available License (RSALv2) and Server Side Public License (SSPLv1). Under this new license, cloud service providers hosting Redis will need to enter into a commercial agreement with Redis. The first company to do so is Microsoft.

In addition, Redis today announced that it has acquired storage engine Speedb (pronounced “speedy-bee”) to take it beyond the in-memory space. More about that in a bit.

Redis license changes

In some way, the licensing move is no surprise. We’ve seen other open source companies like MongoDB, Elastic and Confluent make similar moves. Even Redis — when it was still Redis Labs — went through a series of changes in 2018 and 2019 that changed how it licensed its Redis Modules. That’s when the company introduced the first version of its Redis Source Available License.

“We switched for the same reasons, I think, that everything that has come before us has switched, which is protecting our investment that we make in open source,” Redis CEO Rowan Trollope, who joined the company just over a year ago, told me. “Particularly with Speedb, this is a big investment for us as a startup. If we put that in there and the cloud service providers have the ability to quickly just take and ship it to their customers — essentially without paying anything — that’s problematic for us, as you can imagine.”

The company is quite aware of how this may be perceived by the open source community. Rowan Trollope, who joined the company just over a year ago, told me that he briefed quite a few customers about this change and encountered zero controversy. He is also quite aware that these new licenses mean Redis won’t be considered open source, at least according to the definition of the Open Source Institute. But he did also stress that Redis plans to continue to work out in the open and allow any company to deploy the open source version of Redis.

“I wouldn’t be surprised if Amazon sponsors a fork,” he added. “Microsoft has already licensed Redis. Our doors are open for business for both Google and Amazon to license the software. It’s not that they can’t continue to ship Redis, they just need to have a commercial arrangement with us.”

With this license change, the company is now also consolidating Redis Stack and the Redis Community Edition into a single distribution. Redis Stack launched in 2022 as a cutting-edge distribution that combines some of the most popular modules, a visualization tool and a client SDK. Because of the BSD license, Redis wasn’t able to put its latest innovations into Redis Core, meaning it was missing features like search and query, for example. This move, Trollope argued, will remove complexity for users who previously had to download multiple pieces to get the most out of Redis.

Acquiring Speedb

In addition to the licensing change, the company also today announced that it has acquired Speedb.

At its core, Speedb is a RocksDB-compatible key-value storage engine, which may seem like an odd acquisition for the in-memory data store Redis. For the longest time, Redis was all-in on in-memory storage, after all. Using RAM was the only way to get to the performance levels the team was looking for at the time. Spinning hard drives simply weren’t fast enough. But today, with NVMe drives and their high transfer rates, there’s a middle ground to be found that combines fast drives with in-memory storage as something akin to a very large cache.

Data volumes are going up, RAM is expensive and modern solid-state drives are comparably cheap. Meanwhile, enterprises are looking to rein in their spending right now, so having this new option allows for new use cases — including in AI — that would otherwise be out of reach for a lot of companies.

One other interesting move is that, over the last year or so, Redis quietly acquired many of the language-specific open source client libraries. These libraries will remain open source, Trollope stressed. He noted that this, too, will remove some confusion for developers and allow Redis to take a more active hand in steering the development of these tools.

Trollope noted that we may see additional acquisitions from Redis in the future. “There are a lot of data companies out there that have not achieved escape velocity,” he said. “Redis and Databricks, I think, are the two larger ones that are sort of on the pre-IPO track. But there are dozens of smaller one-off companies. I think there’s probably going to be a lot of consolidation in the industry. I won’t comment on our specific plans, but there’s a lot of opportunity for [acquisitions].”

Ahead of the recent downturn, Redis was on a clear path to an IPO. Trollope reiterated that the company is still ready to go once the IPO window opens again (maybe with Databricks leading the way).

As for the immediate future of Speedb, Trollope told me that Redis isn’t going to be in the business of selling a storage engine for long, but for the time being, the company will continue to support Speedb’s customers.