Roblox confidentially files to go public

  • Posted on October 12, 2020
  • IPO
  • By Glory

U.S. gaming company Roblox announced on Monday that it filed with the Securities and Exchange Commissions, but confidentially.

Roblox is yet to disclose how many shares will be offered, and any other related financial information. However, the gaming company was valued at $4 billion, after a $150 million Series G funding round was led by Andreessen Horowitz, a venture capital firm.

The company is currently working with some investment banks as it plans towards a stock market listing that may come early next year. Roblox hopes that the move to go public would double its current valuation of $4 billion, according to people familiar with the matter.

Since the wake of the coronavirus pandemic and safety measures that followed after, demand in the gaming industry has increased. Demand for video and online games first reached its peak when lockdown orders were in place.

According to data from the NPD Group, a research firm, consumer spending on video gaming in the second quarter reached a high of $11.6 billion, up 30% from the same period a year ago.

Earlier this month, sources familiar with the matter said Roblox was still deciding whether to go public through the traditional initial public offering or just have a direct listing. The gaming company needed to properly weigh its options.

As a small company, the cash gotten from an IPO would go a long way for it. In a direct listing, the company would have no need to sell new shares and underwriting banks would not weigh in on the pricing. This way. The company would not need to dilute ownership stakes of existing shareholders and current investors will be allowed to sell their shares at will.

The company officially came out to say it would file privately, although every additional detail was withheld. This listing would be one of the many tech companies that recently went public, including GoodRx, Palantir, and Snowflake. A similar gaming platform, Unity Software, which went public last month has seen its shares rise more than 60%.

Since its founding in 2004, Roblox has grown into a major video gaming company in the U.S. As of late February, around the time of the Series G funding, the company said it had over 115 million active users and more than 1.5 billion hours of engagement every month.

Roblox gaming platform offers several games on both mobile devices and game consoles. The platform also allows in-game purchases. Gamers can also purchase Robux, a digital currency that is used to purchase premium features.  

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