Roblox, whose online gaming software has been hugely popular with kids during the pandemic, filed its IPO prospectus on Thursday, joining a growing crop of companies that are trying to go public before the end of the year.
Revenue in the third quarter jumped 91% from a year ago to $242.2 million, Roblox said in the filing. Its net loss more than doubled to $48 million. Roblox's platform contains millions of games that can be played across Apple, Google and Amazon devices as well consoles.
Airbnb, DoorDash and online lender Affirm have also filed to go public in the past week, taking advantage of a post-election rally in U.S. stocks and investor demand for high-growth tech names. The companies are trying to hit the market in the period between Thanksgiving and Christmas, people familiar with their plans told CNBC last week.
Roblox was first released in 2006, but has never seen a year like 2020. Daily active users almost doubled in the period ended September to 36.2 million. A metric the company calls "hours engaged" more than doubled to 8.7 billion.
Most popular with kids, Roblox allows users to create an avatar that they can move across titles. Games are free to play, and the company sells digital currency called Robux that can be used to buy virtual goods and enhance characters. Roblox also generates revenue by allowing users to rent servers to host virtual birthday parties and other gatherings, which have been particularly popular during the pandemic.
"We have experienced rapid growth in the three months ended June 30, 2020, September 30, 2020 and for a portion of the three months ended March 31, 2020, due in part to the COVID-19 pandemic given our users have been online more as a result of global COVID-19 shelter-in-place policies," the company said in the filing.
Roblox's filing lands in investors' hands just over two months after gaming software company Unity held its IPO. If investors value Roblox in comparison to Unity, the company is in store for a lofty debut.
Unity just reported third-quarter revenue growth of 53% to $200.8 million and it's valued at $32 billion. Roblox is bigger and growing faster. Based just on a comparable multiple to annualized revenue, Roblox would be worth over $37 billion. That's up from a $4 billion financing round early this year led by Andreessen Horowitz.
Roblox said that for the first three quarters of the year, 34% of its revenue came through Robux sales on Apple devices, while 18% came via the Google Play store. According to the prospectus, 72% of users are on mobile devices, 25% on desktop computers and 3% on consoles.
Altos Ventures is Roblox's largest shareholder, with a 21% stake. Co-founder and CEO David Baszucki owns 12%. Meritech Capital controls 10%, Index Ventures owns 9.9% and Tiger Global owns 7.3%.
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