Roblox raises $150 million at $2.5 billion valuation

Roblox CEO David
Baszucki
Roblox

• Roblox, a massively popular video game with 70 million
  monthly active players, has raised $150 million at a valuation
  of over $2.5 billion. 
• Incidentally, $2.5 billion is also how much Microsoft
  paid for Mojang, the creator of Minecraft — which is seen as
  one of Roblox’s chief rivals. 
• Roblox CEO David Baszucki says that the
  money will go into helping develop Roblox into what he calls a
  new form of “human co-experience.”

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Roblox, a
massively popular video game with 70 million monthly active
players, has raised a whopping $150 million in a funding round
led by Greylock Partners and Tiger Global Management.

While Roblox didn’t disclose terms of the deal, we’re told by a
person familiar with the situation that the company is now valued
at over $2.5 billion. All told, Roblox has raised $251.6 million
in funding.

Roblox CEO David Baszucki tells Business Insider that
while the company is “solidly profitable,” the company needs the
money to invest in some big capital expenditures, including
technological infrastructure and further international expansion.
The ultimate goal is to take Roblox past its origins as a game
and into a whole new form of entertainment.

“Gaming is a part of it, but we see this as much bigger
than that,” says Baszucki.

Roblox is often compared to Minecraft, the international
phenomenon that Microsoft purchased in 2014. This fundraising is
only likely to accelerate those comparisons: $2.5 billion is both
Roblox’s new valuation, and the amount that Microsoft paid for
Mojang, the studio behind Microsoft. 

But those similarities are really only skin deep. In reality,
Roblox is more of a marketplace than a game — unlike its rivals,
Roblox is almost entirely created by its users. All 40
million Roblox games, including popular ones like “Meep
City” and “Jailbreak,” were made by its base of mostly
younger independent developers. If a player chooses to spend the
premium virtual Robux currency — which costs real money — in a
game, the developer gets a cut.

“Heroes
of Robloxia,” a popular game on Roblox.
Roblox

And business appears to be booming. Roblox is
on track to pay out $70 million to developers this year, with
several making their livings from the game, and a few even
becoming millionaires in their own right. Some, like
Alex “Alexnewtron” Binello, have even formed companies and
started hiring employees to build out their Roblox gaming
empires. 

Meanwhile, Roblox itself is cash flow positive as of
earlier this year, and it recently
hired a CFO with an eye toward a possible IPO, though the
company said it had no news to share on that front. 

When it comes to those grand ambitions, Baszucki says
that he doesn’t pay much mind to other games on the market. To
his mind, it’s “less of a competitive landscape, and more of a
vision and execution landscape.” 

To be more specific, Baszucki envisions Roblox as a
new platform for “human co-experience.” Some people are using
Roblox to play soccer, or shooting games, or racing games.
Others, though, are using it for roleplaying, education, and
other “experiences” that can teach positive life skills to
Roblox’s largely younger users.

This is the real potential for Roblox, says Baszucki.
Roblox is already where kids go to hang out with their friends
online — and he wants to expand it even further into a
full-fledged virtual universe, where kids go not just to game,
but to build, create, and generally interact, the same as they
would in the real world, only accelerated by
technology. 

“[Kids] tend to see their reality as both digital and the
real world, and move pretty freely between them,”
says Baszucki. “They’re making their own
rules.” 

Recode reported that Roblox was raising a round valued at
about $2.5 billion back in June.

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