The Seattle-based social-gaming startup, Rec Room, has raised $100 million in new funding, bumping its valuation up to $1.25 billion.
The company has amassed over 15 million lifetime users ever since its establishment in 2016. The year-over-year revenue soared more than sixfold in 2020, most of which came in via in-game purchases.
Nonetheless, the company remains unprofitable as per The Wall Street Journal. “Profitability isn’t a focus for us,” Nick Fajt, the company’s co-founder and CEO, told the publication. “We’re trying to grow the user base and engagement right now.”
Rec Room enables its users to create and play video games online through its platform that is compatible with virtual reality headsets, game consoles, personal computers, and mobile devices. Even though the company’s platform is majorly dominated by teen users, it continues to brand itself as a place for anyone, offering online spaces for digital hangouts, creative classes, and even weddings.
The funding was led by Sequoia Capital and Index Ventures and also oversaw participation from Seattle-based Madrona Venture Group.
“We’re thrilled to continue working with them to build a safe and welcoming community for all, and to make Rec Room the digital third place for kids at heart,” stated Stephanie Zhan, a Sequoia partner and Rec Room board member.
The company currently has about 90 employees and plans to upscale that to over 150 by next year.
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