Roblox goes direct listing from IPO with investment

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 change on Wednesday, confirming a previous report from Bloomberg. Roblox also said it raised $ 520 million through a Series H private placement that valued it at $ 29.5 billion, according to another. declaration. The round was led by Capital Altimeter and Dragoneer investment group.

The funding will allow Roblox to go public without having to raise capital during an IPO. While the United States Securities and Exchange Commission has approved a proposal from the New York Stock Exchange to allow companies to raise capital under a hybrid type of direct listing, no company has yet tested this model. .

Only a handful of companies made direct listings, including Peter Thiel’s Palantir Technologies Inc. and music streaming service Spotify Technology SA. Neither of them raised new capital in the listing.

Roblox had 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 it was delaying its IPO until 2021 to try to improve the process. The postponement came after staggering day one gains in announcements from Doordash Inc. and Airbnb Inc.

Make “ improvements ”

“As such, we have 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 to delay IPO as claim should weigh its timing

In a direct listing, a company typically does not raise capital like it would in an IPO, and investors do not have to wait until a lock-in period expires before selling their shares.

Roblox, based in San Mateo, Calif., Saw its revenue and user base grow as the coronavirus pandemic kept students in their homes and in search of entertainment. The company was valued at $ 4 billion in a $ 150 million funding round in February led by venture capital firm Andreessen Horowitz.

Roblox hosts millions of games created by its users, which then receive a share of the associated revenue. He says two-thirds of all American children ages 9 to 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 these users spent on the platform more than doubled from 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-aged children – at home with free time.

Birthdays, concerts

Roblox has widened its scope to become a social platform, where users can come not only for the game, but also to attend virtual birthday parties and concerts with friends. Amid school lockdowns, Roblox has also been increasingly used to teach everything from coding to physics.

For the nine months ended September 30, Roblox lost $ 203 million on revenue of $ 589 million, compared to a loss of $ 46 million on revenue of $ 350 million for the same period last year. according to deposits.

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. Funding amount was corrected in an earlier version of this story.)