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.
Online game company announced the move on Wednesday, confirming a previous Bloomberg report. Roblox also said it raised $ 520 million through a private H-series placement, valued at $ 29.5 billion, according to a separate document statement. The round was led by Capital Altimeter and Dragoneer Investment Group.
The funding will allow Roblox to go public without having to raise capital in an IPO. While the U.S. Securities and Exchange Commission has approved a proposal by the New York Stock Exchange to allow companies to raise capital in a hybrid type of direct listing, no company has yet tested that model.
Only a handful of companies have made direct listings, including Palantir Technologies Inc., by Peter Thiel, and the music streaming service Spotify Technology SA. None of them raised new capital on the list.
Roblox worked with Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co. on the IPO, intends to list its shares on the New York Stock Exchange under the symbol RBLX.
In December, Roblox told its employees that it was delaying the IPO until 2021 to try to improve the process. The postponement came after stunning gains on the first day in the Doordash Inc. listings. and Airbnb Inc.
Making “improvements”
“As such, we decided to take this opportunity to work with our advisors to see how we can make such improvements,” CEO David Baszucki said in an email to employees last year.
Read more: Roblox will postpone IPO as it claims to weigh its calendar
In a direct listing, a company does not usually raise capital as it would in an IPO, and investors do not have to wait for a lockout period to expire before selling their shares.
Roblox, based in San Mateo, California, has seen its revenue and user base grow as the coronavirus pandemic has kept students at home and looking for entertainment. The company was valued at $ 4 billion in a $ 150 million round of financing in February, led by venture capital firm Andreessen Horowitz.
Roblox hosts millions of games built by its users, who then get a share of any related revenue. It is said that two-thirds of all American children between the ages of 9 and 12 use the platform.
The company had 31 million daily active users in the first nine months of the year, up 82% from the same period in 2019, according to its previous SEC filings. The time spent by these users employed on the platform has doubled since last year to 22 billion hours, the company said.
The use of most video games has exploded with the coronavirus pandemic, keeping millions of people – including school-age children – at home with time on their hands.
Birthdays, concerts
Roblox has expanded its focus to become a social platform, where users can come not only for the game, but also to participate in virtual birthday parties and concerts with friends. Against the background of the school blockade, Roblox was increasingly used to teach everything from coding to physics.
For the nine months ended Sept. 30, Roblox lost $ 203 million in revenue of $ 589 million, compared to a loss of $ 46 million in revenue of $ 350 million for 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 paragraph 11. The amount of funding has been corrected in an earlier version of this story.)