Microsoft Holds Talks to Acquire Discord for at Least $10 Billion

Discord is reportedly up for sale. The communications platform, which has exploded in popularity during the pandemic, is currently in discussions with potential buyers.

According to a VentureBeat report, one of the parties interested in acquisitioning the company is Microsoft. Sources familiar with the matter say that market conditions could lead to a valuation of at least $10 billion. This news follows a valuation of $7 billion in December after Discord successfully raised $140 million in funding.

Discord has proven popular among developers and publishers who connect with their fans via the platform’s video and text communication channels.

News of this potential sale comes amidst several recent big-number valuations in the game industry, like Microsoft’s $7.5 billion dollar purchase of ZeniMax Media and Roblox’s initial public offering of $42 billion.

Despite boasting a userbase of more than 140 million monthly users, sources say underwhelming financials mean it’s still too early for an IPO. The company has shown great promise, however. According to Wall Street Journal, Discord generated $130 million in revenue in 2020, up from $45 million in 2019. The game and tech industries experienced massive gains during the lockdowns, and Discord was one of the biggest winners alongside Twitch and Zoom.

The potential acquisition is likely to be cause for worry among developers who rely on the platform as a community management tool. If Discord is purchased by a party with interests in only a subset of its base, it’s unclear what the acquisition could mean for the rest of its communities.

Discord has raised $480 million in funding to date. While the base service is available for free, users can buy into its Nitro subscription service to gain access to special features and community management tools. The company has chosen to avoid monetizing its users with advertisements in order to preserve the user experience.

Over the last year, Microsoft’s movements in the market have shown a keen interest in acquiring a social media app. In 2020, the Redmond-based tech conglomerate sought to buy TikTok and was in talks to acquire Pinterest.

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