Discord – the free voice, video, and chat platform that is particularly popular in the gaming community – is reportedly mulling a sales deal that could be valued at over $10 billion. As per a report by VentureBeat that cites sources privy to the latest developments, the company is in active discussions with a few big names, and based on its current valuation, the deal could go well over $10 billion. One of the sources even mentioned that it won’t be surprising if the bidding wars exceed the $20 billion mark.
Discord doesn't rely on ads, and makes it dollars from selling a subscription service
Fueled by the pandemic surge, Discord’s monthly user base skyrocketed past the 140 million mark, helping the company bring $130 million in revenue last year, more than triple the figures it reached in 2019. But as per a report by TheWallStreetJournal, the company isn’t profitable yet, and makes its dollars from selling a subscription service called Nitro that offers perks such as custom and animated emojis, animated avatar, high-quality file sharing, and higher video resolution among others.
Secondaries were trading at north of $14B a few months ago so…i’m going to go ahead and say well over $10B. https://t.co/Cw84cFyRZ4
— Michael Dempsey (@mhdempsey) March 22, 2021
Microsoft, Google, Amazon and Facebook have vested interest in the gaming segment, and are likely suitors too
We don’t know the names of potential suitors right now, but deep-pocket names such as Microsoft, Amazon, and Google might be in the bidding queue. And it won’t be surprising if one of these companies end up snagging Discord, given their interest in the gaming segment. Microsoft – whose Mixer acquisition didn’t end up well – might get a huge boost in its gaming ambitions following its $7.5 billion Bethesda acquisition. Amazon already owns Twitch – the biggest name in the streaming domain and also has its own cloud-based game streaming service called Luna.
Google, on the other hand, is focusing on strengthening its Stadia infrastructure after shutting down the in-house games development studio. Facebook might emerge as another possible buyer given its recent push in the gaming segment, after launching its own cloud-based game streaming service in October last year. Notably, Discord has avoided ads, explaining that they hamper the user experience.
Salesforce bought Slack. Microsoft already has Teams. So… Google? https://t.co/M20a5PI6SQ
— Mike Butcher (@mikebutcher) March 22, 2021
Discord's appeal has breached the gaming ecosystem and it is growing rapidly
However, there is also a possibility that the deal could never happen, as the company might just be testing the waters. Discord has reportedly tasked Qatalyst Partners to assess interested parties, but there is no concrete information about a name that is ahead of other suitors in the race.
Right now, Discord’s popularity has transcended beyond just the gaming ecosystem, and is quickly gaining traction among students for collaborating over college work as well as professionals. I also know about multiple companies that rely on Discord for communication between employees. And the best part is that Discord is free, which leaves the doors open for rapid growth in the foreseeable future.