Roblox IPO Receives Unreal Valuation

Roblox has filed an S-1 form with the U.S. Securities and Exchange Commission (SEC) regarding its initial public offering. No pricing details were mentioned in the filing, but the offering is valued up to $1.0 billion. The company intends to list its shares on the New York Stock Exchnage under the symbol RBLX.

The underwriters for the offering are Goldman Sachs, Morgan Stanley, JPMorgan, Allen, BofA Securities and RBC Capital Markets.

The company was founded in 1989 as a physics simulator but it has become much more than that. Roblox is an online game platform and game creation system that allows users to program games and play games created by other users. Roblox is free to play, but there are in-game purchases available.

Users are able to create purchasable content through one-time purchases, known as “game passes,” as well as microtransactions that can be purchased more than once, known as “developer products” or “products.” A percentage of the revenue from purchases is split between the developer and Roblox.

As of August 2020, the company boasted over 164 million monthly active users, with over half of these users being made up of children aged 16 and under in the United States.

Daily active users on Roblox grew 47%, from 12.0 million in 2018 to 17.6 million in 2019, and they grew 82%, from 17.1 million in the nine months ended September 30, 2019, to 31.1 million in the nine months ended September 30, 2020.

In terms of the finances, revenue grew 56% from $312.8 million in 2018 to $488.2 million in 2019. At the same time, the net loss was $97.2 million and $86.0 million in 2018 and 2019, respectively.

The company intends to use the net proceeds from the offering for working capital and general corporate purposes.

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