Photographer: Gabby Jones / Bloomberg
Photographer: Gabby Jones / Bloomberg
Roblox Corp. plans to go public through a direct listing rather than an initial public offering as previously planned.
The online gaming company announced the move Wednesday, confirming an earlier Bloomberg report. Roblox also said it raised $ 520 million through a Series H private placement that valued it at $ 29.5 billion, according to a separate statement. The round was led by Altimeter Capital and Dragoneer Investment Group.
The financing allows Roblox to go public without raising capital in an IPO. Although the U.S. Securities and Exchange Commission has approved a proposal from the New York Stock Exchange to allow companies to raise capital in a hybrid form of direct listing, no company has yet tested that model.
Only a handful of companies have made direct offers, including Peter Thiel’s Palantir Technologies Inc. and music streaming service Spotify Technology SA. Neither has raised new capital in the listing.
Roblox had worked Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co. on the IPO, plans to list its shares on the New York Stock Exchange under the symbol RBLX.
In December, Roblox told employees it was delaying its IPO until 2021 to try to improve the process. The reprieve came after a staggering first-day profit in offers by Doordash Inc. and Airbnb Inc.
Make ‘improvements’
“That’s why 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 to delay IPO as it is said to be weighing on its timing
In a direct listing, a company usually does not raise capital like an IPO and investors do not have to wait for a lock-up period to expire before selling their shares.
Based in San Mateo, Calif., Roblox has seen its revenue and user base grow as the coronavirus pandemic kept students at home and seeking entertainment. The company was valued at $ 4 billion in February in a $ 150 million funding round led by venture capital firm Andreessen Horowitz.
Roblox hosts millions of games built by its users who then receive a share of the related revenue. It says two-thirds of all American children 9 to 12 years old use the platform.
The company had 31 million daily active users during the first nine months of the year, 82% more than the same period in 2019, according to previous filings with the SEC. The amount of time those 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 leaving millions – including school-aged children – at home with time to spare.
Birthdays, concerts
Roblox has expanded its focus to become a social platform, where users can come not only for gameplay, but also to attend virtual birthday parties and concerts with friends. In the midst of school locks, Roblox is also increasingly used to teach everything from coding to physics.
For the nine months ended September 30, Roblox lost $ 203 million on sales of $ 589 million, compared to a loss of $ 46 million on sales of $ 350 million for the same period last year, according to the documents.
The company’s investors include Altos Ventures, First Round Capital, Index Ventures, Meritech Capital Partners and Tiger Global.
(Updates with user statistics in 11th paragraph. The amount of funding has been corrected in an earlier version of this story.)