UPDATE: Roblox Goes Public Trough Direct Listing At $42.6B Market Cap
? Initial Public Offering
CA-based video game platform Roblox went public via a direct listing on the NYSE under the symbol RBLX at a market capitalization of $42.6B. Unlike other recently announced gaming companies, Roblox preferred direct listing to traditional IPO or SPAC, which allowed the founders and shareholders to sell some of their shares from the initial date of public listing
The Company’s shares started trading at $64.50 per share but closed at $69.50 per share
Employees and shareholders already sold more than 388.2m of shares from a total of 650m shares available
Based on Roblox’s 2020 performance ($923.9 Revenue, $1.9B Bookings, and $411m Free cash flow) the trading multiples are 40.7x EV/Revenue, 19.8x EV/Bookings, and 91.8x EV/Free cash flow).
Roblox becomes one of the most valuable companies to go public during the COVID-19 pandemic
In January 2021, Roblox raised $520m in a round led by Altimeter Capital and Dragoneer Investment Group, and its valuation was ~$29.5m
For comparison, in October 2020, Roblox’s valuation was rumored to be $8B
And in February 2020, Roblox was valued at $4B after raising $150m investments in Series G round
Roblox offers Class A common stocks for the direct listing, though the company stated it has two classes of authorized common stock — Class A and Class B, with the only difference in the number of voices per share. Class A is entitled to have 1 voice, while Class B is entitled to have 20 voices
The current company market capitalization is $38.7B
? Business Overview
California-based game developer and publisher Roblox Corporation owns its own game engine Roblox Studio, which allows Roblox players to make their own and play others’ games on the platform. Players can also create, sell and buy virtual items for an in-game currency Robux. Players can obtain Robux by purchasing it with real currency, and from other players
Game developers can advertise their games at Roblox game store. All adds run for 24 hours from their launch and cost from $0.625 to $3.75 based on the type of the add
All players can buy in-game items, but only those who have Premium membership can sell them. Premium membership of 3 different levels requires monthly payments of $4.99, $9.99, and $19.99
As of December 31, 2020, there are about 8 million active developers across more than 170 countries, who create games, including 1,250 developers that earned $10,000 or more, and nearly 300 developers who earned $100,000 or more
Approximately 67% of Roblox users are under 17 years, 61% of all users are from the USA, Canada, and Europe
Being first launched on PC in 2006, Roblox has evolved to mobile in 2011 (iOS launch, Android in 2014) and console in 2016 (Xbox). While being present across multiple platforms, Roblox is primarily focused on mobile with 72% of users’ sign-ups, whereas PC stands for 25% and console — only 3% as of year ended December 31, 2020
? Financial Performance
During 2020, Roblox reported $923.9m revenue, compared to $508.4m in FY 2019, and $324.9m in FY 2018
Bookings, which include revenue that is yet to be counted, were $1.9B in FY 2020, compared to $694.3m in FY 2019, and $499m in FY 2018
Total cost and expenses in the year ended December 31, 2020, were $1.2B while in the FY 2019 they were $584.8m, and $412.5m in the FY 2018
Based on GAAP standards for FY 2020 company has a net loss of $257m, compared to a net loss of $71m in FY 2019 and $88m in FY 2018
Approximately 345% of sales are coming from App Store, while Google Play contributes about 19%
Roblox has surpassed $1.5B in player spending, with over $100m being spent only in May 2020 growing from $30m in the previous year
In its financial statements, Roblox divides its revenue and bookings, with the latter contributing most to the company’s profits, usually exceeding revenue more than twice
? Previous Funding
In January 2021, the Company raised $520m ahead of listing at ~ $29.5B valuation in round led by Altimeter Capital and Dragoneer Investment Group
In February 2020, Roblox received $150m of Series G funding. Andreessen Horowitz led the round, with additional financing from Temasek, Tencent Holdings, Altos Ventures, Meritech Capital and Tiger Global Management
In September 2018, Roblox raised $150m in a Series F round led by Greylock Partners and Tiger Global, with participation from existing investors Altos Ventures, Index Ventures, Meritech Capital Partners and others
In March 2017, the company secured $25m of Series E funding from Meritech Capital Partners and Index Ventures
Before 2017, the company had raised about $10.76m in five financing rounds
?Previous Acquisition
In December 2020, the Company acquired Loom.ai, a California-based startup with a focus on real-time facial animation technology for 3D avatars for a total consideration of $86.7m
In November 2020, Roblox acquired almost all the assets from Imbellus, Inc., a California-based startup, which developed simulation-based cognitive assessments that measure human thought process for a total consideration of $11.7m
In October 2018, Roblox acquired California-based app performing startup PacketZoom for an undisclosed sum
? Roblox In Numbers
45 billion hours played since 2008
30.6 billion total engagement hours in 2020
5.2m peak concurrent users
$328m paid to the community developers in 2020
? Product
Roblox is an online gaming platform that allows people to create their own games and share them with others.
The number of active users has increased from 115m in February 2020 to 164m in August 2020. Currently, the company has 32.6m daily active users, including 7m active developers, who have created more than 18m games within the platform at the time
During 2020, the platform managed to attract 35m new monthly active users
As of August 2020, at least 20 Roblox games have been played more than one billion times, and at least 5,000 have been played more than one million times
Each month, players spend about 3 billion hours on the platform. According to Sensor Tower Store Intelligence estimates, in June 2020 Roblox mobile lifetime player spending surpasses $1.5bn
The number of monthly downloads had been increasing gradually since 2016, reaching its peak of 16.5m in July 2020. By the time of October 2020, the number of downloads per month was 13m, with an overall number of 448.5m
