Investor FOMO following Roblox’s blockbuster public debut is pushing venture capitalists who missed out on that gaming giant to invest in competing platforms.
Today, Rec Room announced it has raised $100 million from Sequoia and Index, with participation from Madrona Venture Group. The deal is a huge influx of capital for Rec Room, which had raised less than $50 million before this round, including a $20 million Series C that closed in December. In 2019, we reported that the company had raised its Series B at a $126 million valuation, this latest deal values the company at $1.25 billion, showcasing how investor sentiment for the gaming space has shifted in the wake of Roblox’s monster growth.
Rec Room launched as a virtual reality-only platform, but as headset sales creeped along slowly, the company embraced traditional game consoles, PC and mobile to expand its reach.
In a press release accompanying today’s funding announcement, Rec Room detailed it has surpassed 15 million “lifetime users” and had shown 566% year-over-year revenue growth. In December, CEO Nick Fajt told TechCrunch that the company has tripled its player base in the past 12 months.
The company has been following in Roblox’s footsteps in many ways as it build out its creator tools and seeks to build out an on-platform economy for game creators. The company says that two million players have created content on the platform and that Rec Room is on track to pay out more than $1 million to them this year.