What is Roblox, the big new gaming IPO darling?
What’s Roblox?
Roblox is an online game platform where you can create your own games and play games made by others — think of it as a Minecraft competitor.The title has been around for a long while; the first PC versionwas released in 2006.
The company released versions for iOS, Android, and Xbox, in 2012, 2014, and 2015 respectively. The idea is to have your own avatar, make friends, buy clothes, and customize appearancesand customize your appearance while playing and creating games using elements available in the expansive environment.
One of the ways Roblox is known in pop culture is its iconic “oof” sound when a player dies. The company had to discontinue briefly that sound because of a copyright dispute with the composer. However, last November both parties came to an agreement, but game developershad to pay $1 to include that soundin their creations.
While the game has been steadily receiving more attention over the last decade or so, the COVID-19 pandemic fuelled its popularity rapidly. A report from CNBC published last April notesthe game saw a massive 40% surgein usage in March 2020.
Last June, the game also added new features suchas virtual private birthday parties and social gatheringsfor kids and their relatives to hang out safely in the online world. In November, famed artistLil Nas X held a virtual concerton the game platform — just likeTravis Scott onFortnite.
How did it reach the IPO stage?
In February 2020, the company raised$150 million from Andreessen Horowitzwith a valuation of $4 billion.
According to analytics firm SensorTower, users downloaded the game 159.6 million times from the App Store and Play Store last year, registering a 43% year-on-year growth. It was also the highest-earning mobile game in the US during the holiday season with $6.6 million gross revenue.
All of this led to its newest financing round in January, where it held a direct listing offering (DPO), allowing existing investors to sell some shares. The companyraised $520 milliontrough this round at a valuation of a whopping $29.5 billion.
Roblox initially decided to go public in December, but delayed it and decided to hold a DPO first. Finally, it was listed on the New York Stock Exchange on March 10.
As CNBC reported, while the company was worth $38.26 billion at closing, its restricted sharessurged its valuation to $45.3 billion.
In a note last week, the company said that it’s expecting to register revenue between $1.44 billion and $1.51 billion, making its year-on-year growth 56% to 64%.
Story byIvan Mehta
Ivan covers Big Tech, India, policy, AI, security, platforms, and apps for TNW. That’s one heck of a mixed bag. He likes to say “Bleh.“Ivan covers Big Tech, India, policy, AI, security, platforms, and apps for TNW. That’s one heck of a mixed bag. He likes to say “Bleh.”
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