Roblox has more than 150 million monthly active users, and many of them actually spend money on the platform. Boston Dynamics has some very impressive tech demos. I know which I think should be worth more.

If they have 150m active users of which many spend money... why do they need to raise money?

Same reason as any other company needs to raise money - to grow faster than their cashflow will allow. A business having healthy revenue, or even healthy profit, doesn't mean they can afford to achieve their ambitions right now. Raising enables them to do more.

The fact a business is raising money is rarely a sign that they actually need money; companies raise because they want money to do something. Heck, if your company genuinely needs money raising is much harder because there's a real risk of the business failing.

I don't disagree, but for healthy cashflow companies, surely debt is a better option?

I think it has something to do with founders being able to take money "off the table" when they raise a round.

If you're in a tight race against other companies which also raise large sums of money, and in markets where "winner take all" effects happen; then, it might still make sense to raise money.

Normally, though, you are probably right.

Yes I do agree, but surely you'd want to tap out all the debt first before going to equity raises. Very rarely see any debt raised in startups, so quite interesting behaviour.

Companies at late stage also need to raise money to establish valuation. That doesn't seem to be the case here though.

If late stage implies that the founders have already been diluted significantly, why would they would want to be diluted even more? (Assuming they still believe in the future of the company)

Because they believe the extra money will allow them to increase the valuation more than it dilutes them.

I can’t really think of one example really where that actually ended up in favor of the founders. Even Kalanick’s Series D raise at Uber back in 2014 seemed a bit weird, and in retrospective given what happened since...

I imagine for it to be actually net beneficial there would still need to be at least 5x or 10x growth potential and assuming it’s already a unicorn that somehow can’t finance otherwise on favorable terms... would imply a quite unique situation.

The universe isnt going to turn itself into paperclips.

They are pushing to capture older users and create a market place of grittier games to help monatize the mostly younger player base.

They are also pushing to internationalize the product.

If you can do X, then you will imagine X + 1.

Because you might prefer to do some things that cost more money rather sooner than later?

S1 shows China ambitions. Need capital to break into a complete new market.

My thought exactly. If they can’t make enough money on their own with that many users then how can they be valued so high.

My gut still says Boston dynamics

So basically you're saying that a robotics company that periodically ships impressive robot demos should be worth more than a weird video game for kids?

IMO while I tend to agree that achieving what Boston Dynamics did is surely the bigger engineering achievement, that doesn't say much in the company's position in the market.

Also here's a more positive narrative: Why not celebrate that online kids games are now evaluated more than military technology!

>Why not celebrate that online kids games are now evaluated more than military technology!

I am not sure I get your point here. First, boston dynamics is not only for military technology, sure its initial and I think a lot of current funding comes from defense stuff but so did the Internet and early web technology's funding. So if we ignore that spin, the narrative is that online kids game is being valued more than advances in robotics. Now that does not sound positive in many ways.

Yes, valued... on the market... as a company... whose goal is to make money.

Ask any IT pro if they've heard of Boston Dynamics: yes! Do you own any Boston Dynamics products? No.

Ask a normal person if they've heard of Boston Dynamics: no.

Ask a normal person if they've heard of Roblox: yes! Do you own any Roblox products? Yes! My kids love it!

You can't take some highfalutin notion of 'potential progress in engineering' and directly translate it to market value. Market value comes from performance in the market.

Boston Dynamics is not a proxy for advances in robotics. It's a company on the market, and it doesn't have much business. Academic research continues to be valued and thus funded.

>Academic research continues to be valued and thus funded.

Is it though? Do you have a source for that? Now I understand its hard to actually calculate how much funding is going to which field, after all Robotics is an interdisciplinary field if there ever was one. Last year the AI budget in US was around 1Billion and another half billion or so for quantum computing. Those numbers are so small its astounding considering a kids game is valued at 29.5 billion american dollars.

edit: Source for numbers

https://syncedreview.com/2020/08/22/trump-slashes-research-f...

I think what you're neglecting here is that narratives are just subjective viewpoints. There's no one true narrative.

And my point with choosing a THAT narrative was to put the headline into a positive light: More money towards kids games than military tech! Hooray!

Apart from that, there's of course a very logical argument too. Which is that a digital economy like Roblox is a novelty. That means it's difficult to evaluate and often it's evaluated by its potential.

The economics for robots on the other hand are drastically different. They'll have to be researched, developed, built, and maintained. Whereas for any software: You write it once and copy it for "free" to as many customers as you want.

Anyways, anyone is free to pick and chose their narrative according to their liking.

I think that is a very weird way to look at it. I think we are using the word narrative differently. I used it as the "story" which fits all known facts. Cherry picking facts can lead to false narratives. Now my read that boston dynamics is a signal to indicate robotics advances may be wrong, after all I know very little about the industry, but then my narrative is also wrong. There are true and false narratives.

Sometimes, when I look at my "smart" robot vacuum cleaner repeatedly banging his head against my table, I think that this poor creature would deserve some of the behavioral innovations that video game characters got.

The crazier comparison is to other gaming companies. $30G is more than the market cap of Take Two (think GTA V). It's about Ubisoft + Capcom + Square Enix + Sega combined.

And presumably the people who just invested half a billion at $30G expect it to go significantly up from that after the company goes public.

But it's pretty clear that Ubisoft + Capcom + Square Enix + Sega are the dinosaurs. They haven't had reasonable growth in sometimes decades. They have never even approached 150 million players, never mind on a sustained monthly basis.

Man that statement makes me feel old, but Sega is the biggest, their growth happened in the previous century, decades ago.

Sega genesis, which I'm randomly assuming was the best selling product of this group of companies, got to about 30 million players. Nowhere near 700 million revenue. To put it mildly, this was not something they could sustain.

So I have little doubt that Roblox is indeed worth more than the sum of these companies. I don't like the games either, sort of a second life but for kindergarten, but clearly they are commanding more success in the market than those companies.

>Nowhere near 700 million revenue.

Ubisoft alone makes more than $2 billion in revenue per year.

edit: Square-Enix is another $2.3 billion in revenue. Capcom is around $700 million per year. And Sega is even more at $3.4 billion per year.

Do you know who Ubisoft are?

They are huge, own many studios and their sales are orders of magnitude higher than the Genesis, which is an odd assumption to make.

An Ubisoft badge is a warning label that says you should avoid buying this new game.

They may have made decent stuff 15 years ago, but now they make pretty garbage.

Come up with a clear path to $ within X years and you could be the next buyer of Boston Dynamics too. I want the cool robot company to be worth more than the online game company too but revenue is what drives these things.

I'm sure BD could make more money if they exclusively signed military contracts. But I'm sure that's not what a lot of people here would want either.

Roblox has a product that people pay for.

Boston Dynamics has a handful of YouTube videos.

This is true in a very real sense, plus Boston dynamics has been bought and sold with some regularity, indicating there seems to some obstacles monetizing the tech.

And, for me, the major impact of those YouTube videos has been the adorable parody of a robot and its robodog: https://youtu.be/y3RIHnK0_NE

On the other hand, Away luggage raised $100 million relatively recently.

I have an Away carry-on and it’s nice, but no technical wonder.

Surely Roblox’ platform’s sophistication, reach, and financial potential are orders of magnitude higher than.. a suitcase.

Away luggage raised $100 million at $1.4B valuation. Which is nuts.

Hardware is hard. Margins and expansion is so different.

Building real things is hard and expensive. Building software, sure it’s hard, but it’s nowhere near as hard.

In a world where Tesla is worth over 700B, it makes sense

Tesla valuation makes sense to me.

They control the market of expensive electric cars that sell like hot cakes. And they will for many years.

They build robotic factories at incredible rates.

They have a great solar roof business.

They have a great battery business. They innovate battery tech.

They have a truck and a semi and a model Y coming out.

And they promised a cheap electric car.

to be fair I still have no real idea what the use case for all of these Boston Dynamic robots is, primarily they seem to make funny Youtube content with them to be honest.

Take the 'Spot' robot. It costs 75k and can carry 14kg of weight. For that cash you can hire a human who is way smarter and can carry much more for like, a fraction of that price.

It is more to do with volumes of product, hardware is costly and the margins are thin if targeting less than 1000 per year. The problem is the product is not versatile to be adopted in a more general sense. The Engineering accomplishment of the company are great, but it does not have a broad enough market and hence reflected in the cost of the product. Similarly, you can compare that to technical books and why they cost so much as the expected sales volumes are not high enough unlike a fictional character book, prime example Harry Potter, it also became a big screen hit with fans.

Hiring cheap human labor in the US costs (for minimum wage) $36 to $40k per year.

So according to [1] spot costs 1 year of a decent-wage employee or 2 years of a minimum wage employee. And of course that's disregarding that spot will happily pull nighttime duty, work on weekends, Christmas, and will happily walk into a chemical plant risking his life for you ...

[1] https://beebole.com/blog/how-to-calculate-the-real-cost-of-a...

The problem with Boston Dynamic's robots imo isn't the cost versus a human but the cost versus a simpler and cheaper yet just as capable (if not more capable) wheeled robot.

I have a very hard time coming up with applications where the walking capability is useful. On the other hand the space wasted to put all this technology could be used for more batteries, a sturdier body to carry heaviers weights, etc.

The advantage of legs is for use in environments set up for humans with working legs. Things like a normal flight of stairs, walking over a moderate sized gap in the floor, etc.

Those sorts of things can be a real pain for wheeled robots (things like stair climbing wheel assemblies, and just larger wheels can overcome some of these, but have their own downsides), while spot has no issues handling them.

If you can design the environment to fit the needs of the robots, then sure wheeled or even on-rails will likely be a better choice (less expensive, greater load, etc) But for retrofitting robots into existing environments without totally reconfiguring them legs can be rather useful.

The question is are there enough such circumstances that Boston Dynamics can actually make reasonable amounts of money? I'm not sure. It is possible there are some fields with a lot of killer applications for such robots, but few spring to mind.

But that human has rights and can't work 24 hours a day...

neither can the robot, I think it lasts 90 minutes or so. And employers don't mind human rights if it's still cheaper than the machine

The point of BD is to build robots that can move like humans in conditions that would kill a human.

Humans usually charge quite a lot for suicide missions.

A counter way of looking at it: kids today are the Boston Dynamics of tomorrow. Roblox is selling pickaxes.

Walking robots are great, but they aren't actually very practical. I wouldn't be suprised if the majority of their sales are to rich people who just want to have a robot dog as a status symbol/toy.

For variable terrain, legged robots have advantages over tracks or wheels. That doesn't preclude some—even a large number—being sold as luxury items, but it doesn't mean they aren't more practical in some circumstances.

Mincraft/Mojang only sold for $2.5B if that's any help

Roblox is beating Minecraft in MAUs. Roblox is also a platform.

How so? How much revenue does Boston Dynamics generate?

How much profit has Roblox made?

Roblox is a platform, Boston Dynamics is not. Boston Dynamics in Roblox can exist.

While $29.5B is a crazy valuation we should not underestimate the powerhouse that Roblox is. It's not just some random overhyped fad. It's dominating the younger demographics right now with no signs of stopping.

I think younger demographics are an overhyped fad, tech companies are just becoming long arms of the financial sector

Roblox was released like 15 years ago. I don't think it is a fad. When users grow out of it there will be new young users to take their place.

> long arms of the financial sector

Not familiar with this phrasing. I tried to google it but didn't turn up something I could understand. Care to explain?

Maybe he is hinting at TINA ( There Is No Alternative ).

nearly every parent I know, including myself, has sunk a bunch of money into "robux", none have sunk any money into boston dynamics robots.

What are BD's sales?