Roblox raises $520M at $29.5B valuation

Re:Roblox raises $520M at $29.5B valuation by onion2k on Thursday January 07, 2021 @05:57AM (#25669631)

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.

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Re:Roblox raises $520M at $29.5B valuation by martinald on Thursday January 07, 2021 @08:07AM (#25670535)

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

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Re:Roblox raises $520M at $29.5B valuation by jannes on Thursday January 07, 2021 @08:18AM (#25670640)

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

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Re:Roblox raises $520M at $29.5B valuation by simonebrunozzi on Thursday January 07, 2021 @11:45AM (#25673356)

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.

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Re:Roblox raises $520M at $29.5B valuation by martinald on Thursday January 07, 2021 @12:38PM (#25674300)

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.

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Re:Roblox raises $520M at $29.5B valuation by jiveturkey on Thursday January 07, 2021 @10:41AM (#25672224)

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

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Re:Roblox raises $520M at $29.5B valuation by MichaelZuo on Thursday January 07, 2021 @11:26AM (#25673043)

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)

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Re:Roblox raises $520M at $29.5B valuation by marcinzm on Thursday January 07, 2021 @11:44AM (#25673344)

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

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Re:Roblox raises $520M at $29.5B valuation by MichaelZuo on Thursday January 07, 2021 @04:15PM (#25677578)

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.

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