Photographer: Gabby Jones / Bloomberg
Photographer: Gabby Jones / Bloomberg
Roblox Corp. intends to go public through a direct listing instead of an initial public offering, as previously planned.
The online gaming company announced the switch on Wednesday, confirming an earlier Bloomberg report. Roblox also said it raised $ 520 million through a private placement of the H series that valued it at $ 29.5 billion, according to a declaration. The round was led by Capital Altimeter and Dragoneer Investment Group.
The financing will allow Roblox to go public without having to raise capital on an IPO. Although the United States Securities and Exchange Commission approved a proposal from the New York Stock Exchange to allow companies to raise capital in a hybrid type of direct listing, no company has tested this model yet.
Only a handful of companies have made direct listings, including Peter Thiel’s Palantir Technologies Inc. and Spotify Technology SA’s music streaming service. None of them raised new capital on the listing.
Roblox has worked with Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co. on the IPO, planning to list its shares on the New York Stock Exchange under the symbol RBLX.
In December, Roblox told its employees that it was postponing its IPO until 2021 to try to improve the process. The postponement came after surprising gains on the first day on listings from Doordash Inc. and Airbnb Inc.
Making ‘improvements’
“So we decided to take this opportunity to work with our consultants to see how we can make these improvements,” said CEO David Baszucki in an email to employees last year.
Read more: Roblox will delay the IPO as the statement should weigh its time
In a direct listing, a company does not normally raise capital as it would in an IPO and investors do not have to wait for the blocking period to expire before selling their shares.
Roblox, based in San Mateo, Calif., Saw its revenue and user base grow as the coronavirus pandemic kept students at home and in search of entertainment. The company was valued at $ 4 billion in a $ 150 million financing round in February, led by venture capital firm Andreessen Horowitz.
Roblox hosts millions of games that are built by its users, who then receive a share of any related revenue. He says that two-thirds of all American children aged 9 to 12 use the platform.
The company had 31 million daily active users during the first nine months of the year, an increase of 82% over the same period in 2019, according to its previous filings with the SEC. The amount of time these users spent engaged on the platform more than doubled from last year, to 22 billion hours, the company said.
The use of most video games exploded with the coronavirus pandemic, keeping millions – including schoolchildren – at home with spare time.
Birthdays, Concerts
Roblox has expanded its focus to become a social platform, where users can come not only to play games, but also to participate in virtual birthday parties and shows with friends. Amid school blocks, Roblox has also been increasingly used to teach everything from coding to physics.
In the nine months ended September 30, Roblox lost $ 203 million to $ 589 million in revenue, compared to a loss of $ 46 million to $ 350 million in revenue in the same period last year, according to documents.
The company’s investors include Altos Ventures, First Round Capital, Index Ventures, Meritech Capital Partners and Tiger Global.
(Updates with user statistics in the 11th paragraph. The financing amount was corrected in an earlier version of this story.)