Roblox, an open-source gaming platform for children, has decided to go public via direct listing instead of an Initial Public Offering (IPO).
The company recently completed its series H fundraising round and collected $520 million. The private fundraising round was led by Altimeter and Dragoneer Investment Group. The H series fundraising round led to a significant rise in the company’s valuation which now stands at approximately $29.5 billion. This means that the company’s net worth got increased sevenfold from $4 billion to $29 billion in just 11 months.
Not long ago, Roblox decided for IPO and filed with the SEC. The company disclosed at the time that it hasn’t made a profit since 2004. However, some sources in talks with CNBC said that the company wanted to double its valuation from $4 billion to $8 billion.
Nevertheless, Roblox decided to delay its IPO until 2021 and circulated a memo among its employees saying that it aimed to get a higher IPO pricing. Now, with a direct listing, there would be no advance sale of shares as in the IPO. This plan was floated earlier when the company initially planned to go public but the idea couldn’t get the green light at that time.
Roblox would be a fifth noteworthy and high-profile Company that decided to go public via a direct listing. Previously, companies like Spotify Technology SA and a data analytics firm Palantir Technologies had opted for the same route.
Roblox is one of the most famous and successful gaming websites for children as well as developers. The platform hosts hundreds of games across PC, mobile, and other gaming platforms. With educational institutions shutting down and forced lockdowns as the new norm, people are seeking home entertainment by playing video games to stay indoors and safe.