U.S based user generated video game company, Roblox recently went public with a staggering $38 billion IPO. The platform went public with a direct listing at the NYSE, trading way higher than its reference price of $45 a share.

About the IPO

The day started with the company trading at about $64.50 a share, giving it a whopping $41.9 billion valuation on its first day on Wall Street. Roblox’s employees sold more than $380 million of the total $650 million available shares. The company however chose not to raise any cash on the day of the launch owing to the healthy amount of money that it already had. The company had recently raised $520 million in a private funding round at a $29.5 billion valuation. Craig Donato, Chief Business Officer stated:

“It’s a nice moment to step back. We don’t normally take these moments to touch the trophy. We’re so always focused on what’s next. It’s nice to just take the moment for today to reflect on that.”

About Roblox

Roblox is a lego-style game creation platform founded in 2006 in San Mateo, California. The platform allows users to program highly intelligent, interactive games and play games developed by other users. Like most online gaming platforms (or tech platforms in general), Roblox saw an unparalleled growth in revenue during the lockdown. Roblox’s star feature is Metaverse, an AI powered digital universe straight out of a sci-fi film. To put it simply, Metaverse is Roblox’s attempt at creating a ‘Ready Player One’ like virtual world that would have its own virtual laws. Roblox claims that this virtual world would not just be limited to games but would also be used for meetings, collaborative work and participating in Roblox’s own virtual economy fueled by its own currency (called Robux). In essence, Metaverse is not another VR based video game but an entire digital social world (Something like a digital Facebook).

Epic Games, the creator of the smash hit Fortnite, is also looking to create a metaverse of its own. Aside from competition, the major challenge that Roblox faces as of now is accessibility to the concept. The entire concept is heavily dependent on VR devices, which are not that common yet. Moreover, the VR devices currently available in the market are incredibly uncomfortable to wear. Roblox believes that the buzz that its high valuation is creating will be incredibly beneficial to the company in terms of publicity.

The company is looking to create VR devices for a better experience in the Metaverse. This will be an extremely interesting development in the AI market, one that could potentially blow it wide open. Craig Donato, CBO at Roblox was quoted as saying:

“This will raise the visibility to the company, which is super important as we try to hire more and more folks to the company. Raising the profile of the company and supporting our recruiting efforts is a great thing. As you know, we have big aspirations for where Roblox can go. And one of the things that we need to make sure that we are able to do is really to step into that vision, and that requires a lot more people. So hiring remains a big focus for us.”

In sum

Lockdown fuelled frenzies have launched many tech companies into stardom, giving them unprecedented revenue and exposure. While most of these already have successful business models, they are constantly looking to push the envelope in a way that would change the market. While it is still difficult to predict the long term trajectory of the AI market, it certainly looks promising. With more young companies bursting out onto the scene than ever before, the competition seems to have been blown wide open. This is expected to fuel rampant innovation in the sector.

About the Author: Akshat Biyani

Akshat Biyani is a contributing Features Writer with extensive expertise in Business, Finance and Technology.