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While the pandemic upset Airbnb’s plans to go public via direct listing, Roblox is taking up the mantle in 2021.
On Wednesday, the gaming company popular among teens said it would not go public via a traditional IPO, but through a direct listing—a method that companies have generally used to sell existing shares rather than raise new funds. The direct listing came to the fore in 2018, when Spotify sought to tackle the first-day stock price pop that often comes with an IPO and elicits criticism that money is left on the table for the companies themselves.
Roblox too saw the soaring stock prices of DoorDash and Airbnb at their December listings—each of which doubled in their first day of trading. Now it is following the small handful of companies that have gone public through the still relatively untested direct listing, including Spotify, Slack, Asana, and Palantir.
While it’s not raising funds via an IPO, Roblox has already started the new year with a bang. The gaming company said it has raised $520 million in Series H funding in private markets from Altimeter Capital and Dragoneer Investment Group, valuing the company at around $29.5 billion. It was last valued at about $4 billion in early 2020.
Still, the lines between the direct listing and IPO have blurred in recent months. The Securities and Exchange Commission allowed for direct listings to raise new funding late last year. While Roblox is not taking advantage of the new changes, importantly, the direct listing also allows shareholders including early employees to sell their shares with no lock-up period. A restriction is typically placed on traditional IPOs that prohibits some shareholders from cashing out on shares for months following a public debut.
SURVIVING AN E-COMMERCE REVOLUTION: As online sales are increasingly taking over foot traffic to physical stores, consumer-facing companies are hitting back by increasingly focusing on their in-store capabilities. Pet stores are honing in on health care and day cares for the fuzzy friends while Walgreens Boots Alliance is seeking to become not only a drug store but also a primary-care clinic. Last year, it struck a deal with VillageMD to open clinics at its locations.
In the latest sign of this trend, AmerisourceBergen agreed to acquire Walgreens Boots Alliance’s distribution business for $6.5 billion as the latter faces competition from Amazon’s new pharmacy business and CVS Health’s recent combination with insurer Aetna.
Lucinda Shen
Twitter: @shenlucinda
Email: lucinda.shen@fortune.com
VENTURE DEALS
- Lacework, a San Jose, Calif.-based security cloud company, raised $525 million valuing it at over $1 billion. Sutter Hill Ventures and Altimeter Capital led the round and were joined by investors including D1, Coatue, Dragoneer Investment Group, Liberty Global Ventures, Snowflake Ventures, and Tiger Global Management.
- Hinge Health, a San Francisco-based health company, raised $300 million in Series D funding. Coatue Management and Tiger Global led the round and were joined by Atomico, Insight Partners, Quadrille, 11.2 Capital, Lead Edge Capital, Bessemer Venture Partners, and Heuristic Capital.
- Udaan, an India-based marketplace of businesses, raised $280 million in extended Series D funding. Octahedron Capital and Moonstone Capital invested and were joined by Lightspeed Venture Partners, partners of DST Global, GGV Capital, Altimeter Capital, and Tencent. Read more.
- Quantum Metric, a Colorado Springs, Colo.-based maker of enterprise software, raised, $200 million in Series B funding. Insight Partners led the round, valuing it at over $1 billion.
- Scorpion Therapeutics, a Boston-based oncology company, raised $162 million. Boxer Capital led the round and was joined by investors including EcoR1 Capital, Omega Funds, and Vida Ventures.
- Dremio, a Santa Clara, Calif.-based data lake company, raised $135 million in Series D funding, bringing the company’s valuation to $1 billion. Sapphire Ventures led the round and was joined by investors including Insight Partners, Lightspeed Venture Partners, Norwest Venture Partners, Redpoint Ventures, and Cisco Investments.
- Mambu, a Berlin-based banking platform, raised €110 million ($134 million). TCV led the round and was joined by investors including Tiger Global and Arena Holdings, as well as existing investors Bessemer Venture Partners, Runa Capital, and Acton Capital Partners.
- Pax8, a Denver-based cloud product marketplace, raised $96 million. Catalyst Investors and Sageview Capital led the round and were joined by Blue Cloud Ventures and Liberty Global Ventures.
- Glia, a New York-based customer service company, raised $78 million in Series C funding. Insight Partners led the round.
- Oxbotica, an Oxford, U.K.-based maker of self-driving software, raised $47 million in a Series B funding. bp ventures led the round and was joined by investors including BGF, Halma, HostPlus, IP Group, Tencent, Venture Science, and Doxa Partners. Read more.
- LifeMine Therapeutics, a Cambridge, Mass.-based biopharmaceutical company focused on fungal biodiversity, raised $50 million in Series B funding. Rick Klausner and Milky Way Investments led the round and were joined by investors including GV, WuXi Healthcare Ventures, Foresite Capital, Arch Ventures, Blue Pool Capital, and MRL Ventures Fund.
- Air Protein, a Pleasanton. Calif.-based alternative meat company, raised $32 million in Series A funding. ADM Ventures, Barclays and GV led the round.
- Ablacon, Menlo Park, Calif.-based heart visualization company, raised $30 million in Series B funding. Zeus Health led the round.
- Aspen RxHealth, a Tampa, Fla.-based clinical pharmacy company, raised $23 million in Series B funding. Bessemer Venture Partners led the round.
- Thistle, a San Francisco-based food delivery company, raised $10.3 million in Series B funding. PowerPlant Ventures led the round.
- Outstanding Foods, a Los Angeles-based maker of plant-based foods, raised $10 millioni n Series A funding. SternAegis Ventures led the round.
- Caveonix, a Falls Church, Va.-based compliance and security cloud company, raised $7.3 million in Series A funding. First In Capital led the round.
- Partake, a New York-based food company tackling allergies, raised $4.8 million in Series A funding. Investors included Marcy Venture Partners, FF2032, CircleUp Growth Partners, Kevin Johnson's Black Capital, Seattle Seahawks’ Bobby Wagner, and Black Star Fund.
- Teamflow, a maker of team collaboration software, raised $3.9 million in seed funding. Investors included Menlo Ventures, Abstract, Elad Gil, and SV Angel.
PRIVATE EQUITY
- Carlyle invested $374 million in Amp Solar Group, a Canadian solar transition company. Financial terms weren't disclosed.
- Resident, a San Francisco-based home goods marketplace, raised $130 million. Ion Crossover Partners and Nexus Capital Management led the round and were joined by Baron Capital Group.
- Alliance Consumer Growth made a minority investment in SuperOrdinary, a New York-based brand management company for those entering the Chinese market. Financial terms weren't disclosed.
- Altamont Capital Partners acquired Specialized Packaging Group, a Hamden, Conn.-based manufacturer of protective packaging. Financial terms weren't disclosed.
- Apara Autism Centers, a portfolio company of Havencrest Capital Management, acquired Behavior Pioneers, a Dallas, Tx.-based provider of therapy services treating children with autism. Financial terms weren't disclosed.
- Bristol Hospice, a portfolio company of Webster Equity Partners, acquired Companion Hospice, a California-based hospice and palliative care services firm. Financial terms weren't disclosed.
- Gemspring Capital invested in Sigga Technologies, a Sugar Land, Tx.-based enterprise software maker. Financial terms weren't disclosed.
- High Street Insurance Partners, backed by Huron Capital, acquired Day, Deadrick & Marshall and Premier Northwest Insurance, insurance agencies in the Northwest. Financial terms weren't disclosed.
- SK Capital invested in Tilley Chemical Company, a specialty chemicals and lubricants services company. Financial terms weren't disclosed.
- Industrial Opportunity Partners recapitalized Little Giant Ladder Systems, a Springville, Ut.-based ladder maker. Financial terms weren't disclosed.
- United Utility Services, a portfolio company of Bernhard Capital Partners, acquired B&B Electrical & Utility Contractors, a Canton, Miss.-based electrical and utility services company. Financial terms weren't disclosed.
- Watermill Group and Walter Capital Partners acquired the remaining stake in Weston Forest, a Canadian maker of softwood and hardwood lumber. Financial terms weren't disclosed.
EXITS
- UnitedHealth Group (NYSE: UNH) agreed to acquire Change Healthcare (NASDAQ: CHNG), a Nashville, Tenn.-based healthcare payments software maker, for about $7.8 billion in cash not including debt. Blackstone backs Change.
- Insightsoftware, backed by TA Associates and Genstar Capital, acquired Certent, a Roseville, Calif.-based equity management company backed by K1. Financial terms weren't disclosed.
- Sysnet Global Solutions acquired NuArx, a Southfield, Mich.-based maker of security and payments compliance software, from, One Equity Partners. Financial terms weren't disclosed.
- The Jordan Company acquired Heartland Home Services, a Macomb, Mich.-based provider of residential HVAC, plumbing, electrical and indoor air quality services, from North Branch Capital. Financial terms weren't disclosed.
- Hootsuite acquired Sparkcentral, a Hasselt, Belgium and New York-based customer conversation software maker. Sparkcentral investors included Jackson Square Ventures, LRM, and Split Rock Partners. Financial terms weren't disclosed.
OTHER
- LafargeHolcim agreed to acquire Firestone Building Products, a maker of roofing products, from Japan’s Bridgestone Corporation for $3.4 billion.
- Entain offered to acquire Enlabs, a Swedish sports betting company, for about $343 million, after rejecting an $11 billion acquisition offer from MGM Resorts. Read more.
- Hopin acquired StreamYard, a Tualatin, Ore.-based live video streaming production company, for $250 million in cash and stock.
IPOs
- Petco Health and Wellness Company, the pet store operator, plans to raise $816 million in an IPO of 48 million shares priced between $14 to $17 each. CVC Capital Partners and Canada Pension Plan Investment Board back the firm.
F+FS
- Venrock, a venture capital firm, raised $450 million for its ninth fund.
PEOPLE
- TPG Capital will name Henry Paulson, a former U.S. Treasury Secretary, to lead a climate change fund. Read more.
