A month after suspending its IPO plans, video game company Roblox Corp. said it had raised $520 million and was planning a direct listing.
A direct listing allows companies to float their shares directly in the stock market, rather than going through the underwriting process typically associated with a company’s IPO. Data mining company Palantir Technologies Inc.,
streaming service Spotify Technology HER
and workplace messaging platform Slack Technologies Inc.
went public via direct listings.
A Series H funding round led by Altimeter Capital and Dragoneer Investment Group placed the company’s shares at $45 each, bringing its valuation to a total of $29.5 billion. The company was valued at $4 billion after raising $150 million in February 2020.
The Santa Barbara Investment Group and Warner Music Group also participated in the funding round, as did several of its existing investors.
The company said the proceeds will go towards Roblox’s growth initiatives and platform that will enable shared experiences among its billions of users.
Roblox was supposed to go public in December. part of a year-end rush of companies seeking to tap into the hot IPO market. However, the Wall Street Journal reported on Dec. 11 that the company delayed its bid after company officials ruled that Airbnb’s strong business performance Inc.
and DoorDash Inc.
made it too difficult to determine the fair price of the video game company’s shares.
Roblox, based in San Mateo, California, which was established in 2004, operates a free online platform that offers millions of games created by its own players with the tools provided by the company.
It generates revenue by selling virtual currency to users called Robux to purchase in-game perks such as virtual pets or accessories to customize the appearance of their avatars. The company has benefited as the pandemic has boosted demand for online games.
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Appeared in the January 7, 2021 print edition as “Game Maker Roblox To List Stock Directly”.