What is Roblox?
Founded in 2004 by Dave Baszucki and Erik Cassel, Roblox is a social platform where people can play and create games and even virtual experiences. The Roblox economy runs on its own currency called Robux. It is free to setup an account. Users can then explore the different virtual worlds or games in the platform that are developed by some of the users themselves.
Developers can create their own games using the tools provided by the platform itself. They produce all the content surrounding their games for other users. They can then sell them and earn payment in the form of Robux, which can then be converted into real currency.
Roblox itself says that the platform was designed for kids and teens from the beginning and they’re committed to making safety a priority. Children under the age of 13 are Roblox’s biggest users, accounting for 56% of its userbase. According to Rooster Money, Roblox was the platform that had the most inflow from pocket money, even beating Fortnite!
As the platform is social and entirely user-generated, the company spent $264M in the Infrastructure and Trust & Safety category, up 70% compared to 2019, to strengthen moderation and prevent scams. The platform does not allow the sending of images or video via chat or one-to-one user interactions. CEO Dave Baszucki said that he wants the platform to be “the world’s safest and most civil society.”
In November 2020, Roblox featured Lil Nas X(the guy who made Old Town Road) in their virtual world doing a concert. It included a motion-captured avatar of Lil Nas X dancing around an in-game stage, shouting out the audience, and singing a number of his hits. There was also the selling of digital merch which players could buy with Robux!
It sure is pushing the idea of metaverse to a whole new level!
Roblox noted in its IPO filing that last year around 4,300 developers and creators earned $328M in revenue through its platform; approximately 1,200 of them earned more than $10,000. In comparison, 2,600 of its developers and creators earned $112M in 2019.
Roblox has 32.6 million daily active users, up 85% YoY. Last year, its users logged 30.6 billion hours collectively, which roughly translates to 3.5 million years’ worth of time. It has had people logged on to its platform for an average of 2 hours 36 minutes per day! Most of its userbase consists of teenagers. According to Roblox, two-thirds of American children between the ages of 9 and 12 were playing Roblox in early 2020.
Valuation over the years
2017 — $500M
2018 — $2.4B
2020 — $4B
2021 — $28.5Bsource: INSIDE
The Grand IPO!
It was valued at $4 billion in February 2020 and 11 months later it raised over $500 million at a $29.5 billion valuation. That valuation was the basis for its $45 a share reference price.
At the time of writing(just a week after the IPO), It is trading at $75 giving it a valuation of $41.40 Billion!