Roblox has raised $150 million in a new round of funding aimed at expanding the international growth of its social platform for user-generated games. The valuation of the company was at least $2.5 billion, said a source close to the company.
The San Mateo, California-based company also said it has more than 70 million monthly active users for its Lego-like virtual world where kids and teens can play games that they create. The funding comes from Greylock Partners and Tiger Global Management, as well as existing investors Altos Ventures, Index Ventures, and Meritech Capital Partners. To date, the company has raised $185 million. I guess we have a good idea who the next Minecraft — or the Minecraft Killer — is now.
Roblox also has more than 4 million young creators who have created 40 million experiences on its platform, and those players get compensated based on how much other users play their games. Two players have more than a billion plays for the games they created in Roblox.
David Baszucki, CEO of Roblox, said in an interview with GamesBeat that the company will use the money to accelerate its international expansion, including building out the data centers, language localization, and other infrastructure necessary to support more growth. International makes sense as an expansion opportunity, as Roblox is already widely distributed on modern smartphones, tablets, desktops, Xbox One, Oculus Rift, and HTC Vive.
“Our rate of growth is very high. We have more than 70 million monthly active users,” said Baszucki. “We’ve started to pass some cool milestones. We have two developers with more than 1 billion plays and one with more than 2 billion plays.”
Roblox shares revenue from games on its platform with the creators. This year, the Roblox creator community is on pace to earn more than $70 million from experiences published on the platform. That is money paid by Roblox to the user creators, and it has turned into life-changing earnings for a lot of creators.
“Roblox’s thriving community and engagement reminds me of the early days of Facebook and LinkedIn. This is a platform that has reshaped the way kids and teens play with friends, through millions of user-created immersive experiences on Roblox,” said David Sze of Greylock Partners, in a statement. “David Baszucki and the team at Roblox have only scratched the surface of their part in the future of interactive entertainment. We are excited to partner with them as they expand their tools and grow their team to continue to empower tomorrow’s creators around the world through imaginative play.”
Roblox also recently introduced Roblox Education, an initiative comprised of free, open-source curriculum for educators, summer coding camps, and an online coding challenge aimed at teaching coding fundamentals.
The company now has more than 400 employees, compared to about 300 at the beginning of the year. With such fast growth, it’s easy to see why the company might need such a large round of funding. But Baszucki said the company is profitable.
“We’re growing fast. We continue to be profitable,” he said. “That said, as we grow around the world and expand, we wanted to strengthen our balance sheet a bit. We’re building out a lot of infrastructure around the world to support our global growth. That will help us get there as well.”
Baszucki believes that Roblox can create a space on the internet where politeness and collaboration can trump bad behavior. But to maintain that environment, Roblox has to invest a lot of money and hold players to its rules of conduct. The company’s moderators review every uploaded image, video, and audio file within the games to make sure they are safe and age appropriate.
“I feel we have the opportunity of being part of a new and emerging category for human co-experience,” Baszucki said. “Less than a challenge, I almost think of it as an opportunity and responsibility to participate in the formation of this human co-experience category, to make it civil and make it safe and make it a place where people can learn and create and even practice life skills, as well as having fun. I see this as an enormous opportunity for us.”
Baszucki said machine learning is helping out with the task of monitoring and filtering.
“If you told me five years ago that a 13-year-old could be a game developer, I would have been skeptical,” Sze said in a blog post. “If you told me there would be another platform game that would be more popular than Minecraft, I would have been really skeptical. ”
He said Roblox is in a complete different mode than games that offer sequels year after year, like Call of Duty. Rather, Sze said Roblox is more like YouTube than Netflix, as it lets anyone create and play interactive, 3D multiplayer casual games. The tools are simple and intuitive, yet they let creators build sophisticated games within the world of Roblox.
Roblox was founded in 2005 by Baszucki, who the company has likened to the James Halliday character in the book and film, Ready Player One. The company even had a site-wide Egg hunt, in homage to the film, when the Steven Spielberg movie debuted.
“In certain ways I’d like to live up to that, and in certain ways we’d like to go beyond that vision in our own way,” said Baszucki, who noted his own role is more as a mentor for the company’s leaders and teams.
Now the company has crossed peaks of more than 2 million concurrent players. The company recently rolled out Spanish for the game and its development tools, and the company has started to roll out French, German, and Brazilian Portuguese.
Pitchbook reported earlier that the latest round valued Roblox at $2.4 billion. A source close to the company said the valuation is at least $2.5 billion. In the spring of 2017, Roblox said it raised $92 million. But in fact, the correct amount for that round was $25 million raised for the company, as the rest went to shareholders who sold shares to secondary investors.
“One of the things we’re doing, in addition to translating our client into multiple languages, is giving developers tools so they can build experiences that run concurrently in multiple languages,” he said. “As a platform, our real goal is for someone who’s a Roblox creator to make one experience that can work around the world in many languages.”
As to the investors, Baszucki said, “We’re adding two incredible partners to our team. Dave Sze from Greylock and Lee Fixel from Tiger Global are two of the best, and I’m really excited to be working with them.”
On future growth, he said, “The primary opportunity is in making our core product reach more people. That includes people of all ages and people who are in different parts of the world. The primary focus on us is making Roblox into an international, global platform that allows people to come together and do things together from all walks of life.”
Measurement firm Sensor Tower estimates that Roblox has grossed approximately $210 million worldwide on mobile so far this year, three times more than by this point in 2017. Players in the United States have accounted for about 65 percent of spending in 2018. Worldwide, Roblox ranked No. 26 in terms of mobile gaming revenue last month.
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