Roblox Raises More Than Half a Billion in Private Fundraising


Roblox announced that it raised $520 million in private financing and that it will go public through a direct listing.

Roblox is an online gaming company for kids that recently delayed its IPO after shares of DoorDash and Airbnb surged after going public. Direct listings allow existing shareholders and employees to sell their shares to new investors once they are available to the public. Spotify, Slack, and Palantir all used direct listings to go public.

However, a new SEC rule allows Roblox to raise primary capital at the same time as their direct listing. The financing round has been led by Altimeter Capital and Dragoneer Investment Group. Their valuation of Roblox is $29.5 billion, more than 7 times what the company was valued at in February 2020. Brad Gerstner, Altimeter’s CEO, stated “2020 is going to go down as the year the traditional IPO got disrupted.”

“That means lower costs to companies, which is better for employees and it means a lot more fair access to retail investors,” said Gerstner.

Roblox was released in 2006 and has seen a massive increase in demand from kids forced to stay inside during the pandemic. According to the company's prospectus, Q3 revenue increased 91 percent year-over-year to $242.2 million.

There is no timeframe for Roblox to go public, but a deal is expected soon.

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Economics, Finance and Investing