Roblox Shares Surge On First Day Of Trading As Another Gaming Company Joins The Public Markets

Shares of gaming company Roblox closed at $69.50 on Wednesday in the first major venture-backed tech direct listing of the year.

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If you’ve never heard of Roblox, the kids in your life most likely have. The company, which allows players to create their own games and play games made by others, is especially popular among young users. Roblox said in its S-1 filing with the Securities and Exchange Commission that 25 percent of its users are under the age of 9, and 29 percent are between the ages of 9 and 12. The company reported having 31.1 million daily active users.

Roblox set a reference price of $45 and saw a 43 percent pop Wednesday, with its stock opening at $64.50.

The company, which was founded in 2004 and is based in San Mateo, is also among a slew of gaming companies to go public in the past year, along with Unity Technologies, Playtika and AppLovin. 

The gaming industry has seen a boost thanks to the COVID-19 pandemic and people being stuck indoors. With stay-at-home orders and social distancing guidelines in place, many people have turned to gaming for entertainment. Roblox notes that it saw explosive growth in 2020, reporting $588.7 million in revenue in the first nine months of the year, up 68 percent from $349.9 million during the same period in 2019.

While Roblox is one of the first major direct listings for a VC-backed tech company this year, another well-known company isn’t far behind. Coinbase is expected to go public on the Nasdaq as well. And there are plenty of other companies prepping for their public debuts, whether through a traditional IPO or a SPAC, including AppLovin, VIZIO, DigitalOcean and Compass.

Roblox is backed by investors including Greylock, Index Ventures and Tiger Global Management. It most recently raised a $150 million Series G led by Andreessen Horowitz in February 2020.

Among the largest stockholders in the company are First Round Capital, Altos Ventures, Index Ventures, Meritech Capital and Tiger Global Management.

Illustration: Li-Anne Dias