Roblox Files for $1B IPO

Roblox was founded in 2006, but has never seen a year like 2020. Daily active users almost doubled in the period ended September to 36.2 million. A metric the company calls “hours engaged” more than doubled to 8.7 billion.

If you don’t have kids, you may not be totally familiar with Roblox. It’s this free, Fortnite-like gaming platform popularized by the youths, where users create a Lego-like avatars that can be plugged into all the available games you spawn into. They monetized by shrewdly rolling out their own digital currency called “Robux” that they sell to users to spend on virtual goods from the Avatar Shop. e.g. character skins, accessories, bundles, and animation packs.

Roblox also makes their money by letting users rent servers to host virtual hangouts, which has “experienced rapid growth” recently as people have been at home and more online than ever during quarantine. Their daily active users rose 82% to 31.1 million in the months leading up to September, from 17.1 million in year-ago period. Revenue surged 68% to $588.7 million in the same timespan.

Roblox filed to sell $1 billion in shares and plans to list on the New York Stock Exchange under the symbol RBLX. Underwriters include the typical bigwigs; Goldman Sachs, J.P. Morgan, and Morgan Stanley.

Roblox said that for the first three quarters of the year, 34% of its revenue came through Robux sales via Apple devices and 18% from the Google Play store. Roblox’s largest shareholder is Altos Ventures with a 21% stake. Co-founder and CEO David Baszucki owns 12%. Meritech Capital controls 10%, Index Ventures owns 9.9% and Tiger Global owns 7.3%.

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