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Roblox is Reportedly Worth $29.5 Billion and is Planning for Direct Listing

The gaming platform company Roblox Corporation raised around $520 million in private capital within the first week of 2021. Securing this funding for the company brought up its value to a whopping $29.5 billion. Roblox CEO David Baszucki, along with the rest of the Roblox Corp.  team, made the announcement on January 8th that the company plans on going public through direct listing as early as February. An independent valuation report placed the price for each share at $41.52, which will be listed in the New York Stock Exchange with the ticker symbol ‘RBLX.’

Courtesy of Roblox Corporation

Plans for the company to go public through direct listing were originally scheduled for December 2020, but that was delayed due to the volatility of the market at the time. They held off after paying attention to the performance of other public offerings especially Airbnb and DoorDash, whose shares popped during early trading. 

Taking Roblox Corp. to the public markets as opposed to a traditional IPO gives current employees and stakeholders the ability to immediately sell stock to fresh investors. Other companies which followed this route to avoid a share sale include Spotify, Slack, and Palantir.

Roblox Corp. had humble beginnings as a small company which released their gaming service in 2006 for PC. Later versions became available on iOS, Android, and Xbox One. The platform acts as a host for user-generated games that can be shared and enjoyed by other users on the app. A player creates an avatar that they are able to maneuver through an endless amount of games spanning across many different genres. 

Courtesy of Roblox Corporation

The games are all free but users have the option to purchase Robux for advanced options in customizing their characters and games. Portions of those Robux transactions then get paid to the outside developers. The most popular games on the service can attract 10 million users a month.

Since the service began in 2006, Roblox has changed from being solely a gaming platform to creating a global community containing several modes of connection. As of right now, Roblox has close to 200 million users playing games made by about 2 million developers. The 2020 pandemic has also contributed greatly to the current success of Roblox

The app has been used for teaching courses while the schools were shutting down and for kids to socialize safely over the internet. It has been used for concerts, birthday parties, and graduation ceremonies. It is safe to say that once the pandemic ends, Roblox will not be used as often for these purposes.

The main reason investors believe in further growth for the company is because it is a medium for aspiring game developers. More than half of the users on Roblox are aged 16 and below. 75% of kids between 9 and 12 are using the service. Considering that the video game industry has become the biggest global entertainment industry, the younger generation is going to aspire to cultivate the skills required to contribute to the industry. Roblox contains a user friendly interface which provides young developers with the base level tools necessary to make games and spur creativity.

As Roblox Corp. goes public, it aims to become something more than just a gaming platform company. Given its countless amount of uses in the past year, it is without question that we have yet to see Roblox in its final form.

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