Rec Room raises $145M at a $3.5B valuation

Social gaming platform Rec Room announced that it has raised $145 million at a $3.5 billion valuation. The funding round comes just nine months after the company raised $100 million at a $1.25 billion valuation.

Founded in Seattle in 2016 by Bilal Orhan, Cameron Brown, Dan Kroymann, John Bevis, Josh Wehrly and Nick Fajt, Rec Room was launched as a free-to-play experience.  

Coatue Management led the latest funding round, with participation from existing investors Sequoia Capital, Index Ventures, and Madrona Venture Group. 

“It’s been amazing to watch Rec Room grow from a tiny collection of mini-games into a global platform with millions of experiences built by the community. The platform has become a place where people can come together to form meaningful connections, build communities, and share their creativity,” Rec Room CEO Nick Fajt said in a statement. “There’s still so much more we want to do, and as we head into 2022, we’re excited to build more experiences, expand to new platforms, invest in best in class trust and safety systems, and continue to expand our creator tools.”

It has now grown to 37 million users who install and play games in rooms where they virtually hang out with other users. Currently, there are about 12 million rooms on the platform. While it’s unclear how many active users are out of those 37 million numbers, Rec Room said the number of monthly users has increased by almost 450% last year, since November 2020, with mobile users providing some of that growth, increased by tenfold during that period.

“We just we raised last round not that long ago. And we certainly have not spent through that in any way, shape, or form,” said Mike Schmid, vice president of business development, in an interview with GamesBeat. “It’s really about the opportunity for growth right now. It’s tremendous. We see real traction when it comes to performance marketing over the past like six months.”

Rec Room is available on mobile devices, game consoles, PC and VR headsets, including iOS, Android, Xbox, PlayStation, Oculus, and Steam.

“We love the world Rec Room has created for friends to build and play together,” said Matt Mazzeo of Coatue Management in a statement. “From phones to VR, millions of players are hanging out in Rec Room, and we’re excited to partner with the team as they make the digital world more fun and immersive.”