Investors betting on future of gaming lift Roblox value to $6bn

Investors in Roblox say it has the potential to become one of the world’s most popular online hangouts.

Attendees at last year’s Roblox developer conference.

Investors in Roblox say it has the potential to become one of the world’s most popular online hangouts.

It is now valued at about $US4bn ($6bn) after closing a new funding round led by venture-capital giant Andreessen Horowitz, according to a person familiar with the matter.

Roblox was last valued at more than $US2.5bn in September 2018. On Wednesday it said it raised $US150m and launched a tender offer to buy up to $US350m of common and preferred shares. Existing investors including Altos Ventures, Meritech Capital and Tiger Global Management also participated in the funding round.

Andreessen Horowitz, known for investing early in technology heavyweights such as Facebook, hadn’t previously backed Roblox. Its investment in the company comes from a $US2.2bn late-stage fund that the firm created in May.

“What gets us really excited and where we see the most upside is in the long-term vision,” said David George, general partner at Andreessen Horowitz. “We think there is a real chance for Roblox to become the metaverse,” referring to a shared virtual world as ­described in works of fiction like “Ready Player One”.

Roblox, which was released in 2006, isn’t just a single game: it is a free online hub with tens of millions of games, all of which were made on the platform with tools the company provides.

Players log in through mobile devices, gaming consoles and computers, and they can socialise with each other by typing messages into the platform’s chat function. Users can also spend real money on virtual currency called Robux to purchase in-game perks such as virtual weapons or to customise their avatars.

Even given its age, Roblox is continuing to grow its user base, moving to more than 115 million monthly active users worldwide from about 70 million in 2018, the company said.

Last year Roblox ranked as the third highest-grossing “game” across iOS and Android devices in the US and Canada, according to data from industry trackers NPD Group and Sensor Tower. Also last year Roblox was the fifth most-watched “game” on Google’s YouTube, with nearly 30 billion views, according to the Alphabet unit.

“Given the social dynamics and engagement we’re seeing, there’s a possibility where it becomes the largest social experience in the world,” said David Sze, a partner at Greylock Partners, an ­investor in Roblox.

The firm didn’t join the latest round but Greylock’s investment in Roblox in 2018 was “one of the largest cheques we had ever written for a single company in our history”, he said.

Roblox has now raised $US335m in funding overall and counts itself among gaming companies that have raised hundreds of millions of dollars from venture-capital investors in recent years, according to PitchBook Data.

Roblox will use the new funding to continue expanding its mostly teenage and pre-teen user base and investing in efforts to keep them safe, its finance chief, Michael Guthrie, said.