What is Roblox, the big new gaming IPO darling?


Roblox, the world of kid-friendly gaming, debuted on Wall Street on Wednesday as the company’s stock price closed at $ 69.50 – up 43% from the initial price.

But what exactly is Roblox and why has it held a IPO? We will take a look.

What is Roblox?

Roblox is an online gaming platform where you can make your own games and play games created by others – think of it like a Minecraft competitor.The title has been around for a long time; the first PC version was 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, shop for clothes, and customize appearances.and customize your appearance while playing and creating games using items available in the extended environment.

One of the ways Roblox is known in pop culture is its iconic “oof” sound when a player dies. The company had to briefly discontinue this sound due to a copyright dispute with the composer. However, last November the two sides came to an agreement, but the game developers had to pay $ 1 to include this sound in their creations.

As the game has received increasing attention over the past decade, the COVID-19 pandemic has quickly fueled its popularity. A CNBC report released last April notes that the game saw a massive 40% increase in usage in March 2020.

Last June, the game also added new features such as virtual private birthday parties and social gatherings that allow children and their loved ones to spend time safely in the online world. In November, a famous artist Lil Nas X organized a virtual concert on the gaming platform – just like Travis Scott on Fortnite.

How did it get to the IPO stage?

In February 2020, the company raised $ 150 million from Andreessen Horowitz with 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, recording 43% year-over-year growth. It was also the highest grossing mobile game in the United States during the holiday season with $ 6.6 million in gross revenue.

All of this led to his final round of funding in January, where he organized a Direct Listing Offer (DPO), allowing existing investors to sell certain shares. The company raised $ 520 million in this round for a valuation of $ 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 the close, its restricted shares pushed its valuation up to $ 45.3 billion.

In a note last week, the company said it expects to have revenues of between $ 1.44 billion and $ 1.51 billion, which would make its year-over-year growth of 56% to 64%.

Published March 11, 2021 – 07:54 UTC


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