Roblox, an online gaming company for kids, announced that it raised $520 million in a private funding round at a valuation of $29.5 billion. And the company also revealed that it will soon go public via direct listing. Roblox had filed to go public late last year.
Some of the other tech companies that also went public recently via direct listing include Spotify, Slack, and Palantir. Through the IPO, Roblox is going to allow existing shareholders and employees to sell stock to new investors on day one, according to CNBC.
This round of funding was led by Altimeter Capital and Dragoneer Investment Group. Altimeter CEO Brad Gerstner told CNBC that “2020 is going to go down as the year the traditional IPO got disrupted.” Now companies have a menu of options including the traditional IPO route, direct listings, and going public through a special purpose acquisition company (SPAC).
“That means lower costs to companies, which is better for employees and it means a lot more fair access to retail investors,” added Gerstner.
Roblox’s revenue for the third quarter increased 91% compared to a year earlier to $242 million. And Roblox’s daily active users nearly doubled in the period ended September to 36.2 million. And the “hours engaged” on the platform more than doubled to 8.7 billion.
The games on Roblox are free to play and there is a digital currency sold on the platform called Robux. Robux can be used for buying virtual goods.
Roblox was founded in 2005 by CEO David Baszucki. Before Roblox, Baszucki founded and served as CEO of Knowledge Revolution (acquired by MSC Software in December 1998).