Roblox Files For IPO As Pandemic Drives Video Game Growth

Nyse

(Bloomberg)

Online video-game company Roblox Corp. filed for an initial public offering, aiming to capitalize on a pandemic-fueled sales surge and the growing popularity of its platform.

The size of the offering was listed at $1 billion in a U.S. Securities and Exchange Commission filing Thursday, though that’s a placeholder that will likely change. The company will disclose plans for the size and price range for the share sale in a later filing.

Roblox hosts millions of games that are built by its users, who then get a share of any related revenue. It says that two-thirds of all U.S. kids 9 to 12 years old use the platform.

The company had 31 million daily active users during the first nine months of the year, up 82% from the same period in 2019, according to the filing. The amount of time those users spent engaged on the platform more than doubled from last year to 22 billion hours, the company said.

Usage of most video games has exploded with the coronavirus pandemic keeping millions — including school-age children — at home with time on their hands. Global game revenue is expected to grow almost 20% this year to $175 billion, according to researcher Newzoo.

Parties, Physics

Roblox has been expanding its focus to become a social platform, where users can come not just for gameplay but also to attend virtual birthday parties and concerts with friends. Amid school lockdowns, Roblox also has been increasingly used to teach everything from coding to physics.

The company, based in San Mateo, California, was valued at $4 billion in a $150 million funding round in February that was led by venture capital firm Andreessen Horowitz.

For the nine months ended Sept. 30, Roblox lost $203 million on revenue of $589 million, compared with a loss of $46 million on revenue of $350 million for the same period last year, according to the filing.

Founded in 2004, Roblox added media executive Andrea Wong to its board last month. She was most recently the president of international at Sony Corp. The company’s investors include Altos Ventures, First Round Capital, Index Ventures, Meritech Capital Partners and Tiger Global.

IPO Record

The listing by Roblox will push IPOs even further past previous records. So far this year, an all-time high of more than $144 billion has been raised on U.S. exchanges, according to data compiled by Bloomberg. Airbnb Inc., DoorDash Inc. and Affirm Inc. filed this month to go public and are expected to add billions of dollars to that total.

Roblox’s offering is being led by Goldman Sachs Group Inc., Morgan Stanley and JPMorgan Chase & Co. The company is seeking to list its shares on the New York Stock Exchange under the symbol RBLX.

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