November 21, 2020 at 7:42 pm #3426
Roblox Cofounder Dave Baszucki Needs To See This Magic Number To Become A Billionaire
Roblox, the online platform where kids build Web-based games, is going public, and its cofounder Dave Baszucki is about to become an even richer guy.
Exactly how rich? Well, according to the SEC filing Roblox filed Thursday, Baszucki owns approximately 13% of the company. The stake is worth about $470 million, a figure based on the $4 billion valuation Roblox reportedly fetched from an Andreessen Horowitz-led funding round in February—and adjusted for the 10% discount Forbes places on private firms.
To hit billionaire status, Baszucki would need the company’s valuation to hit $8 billion on the public market, a figure some observers have thought it could reach as soon as its initial public offering.
Powering that market debut is a lot of ambition. Roblox is attempting to build something similar to Epic Games’ Fortnite: an immersive online world where players can customize their appearances and live out a rich digital existence—the so-called “metaverse,” a word appearing 16 times in Roblox’s newly submitted S-1, the document kicking off a company’s path to an IPO. Unlike Fortnite, the games and experiences on Roblox’s platform are created by its young users, and through September, those amateur developers earned $209.2 million selling games and virtual goods on Roblox, up from $72.2 million a year ago.
“A lot of the developers on Roblox grew up on the platform,” Baszucki told Forbes in 2018. “And many of them are now starting to earn their living on the platform.”
Baszucki started work on Roblox back in the early 2000s, launching its beta version in 2005. It didn’t take off until he and cofounder Erik Cassel opened up Roblox to outside developers. By 2012, it had 7 million unique visitors per month. In the following year, Baszucki found himself forced to lead the business alone after Cassel died of cancer.
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The company has changed its revenue model over the years, switching from an advertising-based scheme to its current one: selling a virtual currency called Robux—100 Robux for $1—that players can spend on Roblox games and digital items. Developers earn a share of the Robux spent on their games, cashing out 100 Robux for 35 cents. Popular games on the site currently include Grand Piece, an adventure game set on the high seas, and Welcome to Bloxburg, a Sims-like title where characters work jobs, socialize and earn money to spend on homes and cars.
Roblox’s S-1 paints a picture of a fast-growing company beloved by its players. Through September, Roblox said it had attracted 31.1 million daily active users, who had spent 22.2 billion hours on the site. (Comparatively, it had 12 million such users logging 9.4 billion hours in all of 2018.) It’s on track to end 2020 with its revenue doubled from two years ago, ending September with $588.7 million in sales. Despite the surging sales, Roblox is still losing money and reported a $203.2 million loss through September, significantly higher than the $87 million it lost in all of 2019.