Discord has become the biggest networker of gamers in recent years. Always following the motto of being free for all. Anyone can open their own server, set it up completely, and invite and stay connected with hundreds, if not thousands, of fellow gamers. But Discord is also the top tool for developers who are in close contact with the community through servers.
And as a result, Discord as a company has a great strategic asset. And accordingly, there are some potential suitors and interested buyers targeting Discord. But whether to sell or not is ultimately up to CEO Jason Citron. It's up to his discretion whether the mission Discord is pursuing can be better pursued as a standalone company or with a big backer behind it but dependent on it.
One source says it has "heard of active discussions with some lots" and that the market would be in a position where tens of billions are realistic. A Discord spokesperson, in turn, would not comment on the current rumors. However, if several Venturebeat sources are anything to go by, Discord would likely currently be "in play."
Roblox example and potential IPO
After already Roblox has received a public offer of over $42 billion, then of course the speculation begins as to how much this and the company may be worth. So the market of games is currently full of plans and calculations. And just that Roblox offer of March 10 also leaves open the possibility for other companies to think about increasing their own profit and brand value through purchases and sales. Discord could also be the test for other companies with similar communications technology to see whether or not it's worth following in Roblox's footsteps, or even going public.
Discord, as mentioned at the beginning, is growing at a tremendous rate. The company boasts over 140 million active users. And it's still growing. But this is offset by the finances. As the Wall Street Journal reported, while they saw a huge increase in revenue from $45 million in 2019, to $130 million in 2020, that's how every gaming-focused company fared in the Corona year of 2020.
So it would be too early for an IPO. Discord admitted in the same WSJ article, however, that it is far from profitable yet. Unlike Playtika. The Israeli company, which specializes in the development of mobile games, could only become profitable from a turnover of 2.37 billion dollars. At the same time, Playtika relies on microtransactions by default, while Discord does not set such hurdles for "customers" and you can enjoy Discord to the fullest extent for the most part for free.
In contact with dealmaker company
A source told Venturebeat that Discord has once again engaged Silicon Valley-based "dealmaker" firm Qatalyst. The latter previously handled Discord in 2018, when it was then up for sale and offers of between $2 billion and $6 billion were received. But at the time, Discord decided against the sale because the companies that made offers required Discord to engage in certain practices that it did not support as a company. Among them, for example, would be the placement of advertising. At the time, they felt the best way to protect the company's values was to remain independent. And since these values are very important to the leaders of Discord, no purchase could be made this time either.
An internal source, who did not want to be named, says that they currently see no reason why Discord should be sold. The company would be in a good position, they would have their fate completely under their own control.
Who might be interested in Discord
But since there is currently a bid of over 10 billion on the table, or at least credible sources are reporting it, one has to assume that this offer can only come from a major publisher like EA or Activision, or even from the major platforms Twitter, Facebook, Google or Microsoft. Accordingly, there is great concern among many smaller developers that the critical role Discord plays in linking players and developers could be abused by a third party for its own purposes. A sale would eventually turn Discord from the standalone company committed to all gamers into a subsidiary dependent on a large big-tech company.
If pressure could be put on Discord CEO Jason Citron from anywhere, it would come from companies that have previously bought into Discord. Among them are Greylock, IVP, Spark Capital, but also Tencent. While various interested parties have also recently put money into Discord, and Jason Citron was thus able to achieve over 450 million dollars for Discord, he still avoids placing advertisements in Discord. It would, in his estimation, simply harm the user experience. Instead, he relies on the "Nitro" subscription model. In doing so, it has definitely paid to include other communities besides gamers to increase revenue from subscribers.
Discord is able to convince mainly thanks to very good audio quality and thus continues to grow in popularity. But other competitors are gaining ground, including Clubhouse. However, whoever had control over Discord would prevent a coup by Clubhouse, which is why it could be particularly interesting for companies like Twitter and Facebook to enter the business here.
So the future of Discord is currently on a knife edge. And it will be interesting to see how the current situation around the company develops.
And as a result, Discord as a company has a great strategic asset. And accordingly, there are some potential suitors and interested buyers targeting Discord. But whether to sell or not is ultimately up to CEO Jason Citron. It's up to his discretion whether the mission Discord is pursuing can be better pursued as a standalone company or with a big backer behind it but dependent on it.
One source says it has "heard of active discussions with some lots" and that the market would be in a position where tens of billions are realistic. A Discord spokesperson, in turn, would not comment on the current rumors. However, if several Venturebeat sources are anything to go by, Discord would likely currently be "in play."
Roblox example and potential IPO
After already Roblox has received a public offer of over $42 billion, then of course the speculation begins as to how much this and the company may be worth. So the market of games is currently full of plans and calculations. And just that Roblox offer of March 10 also leaves open the possibility for other companies to think about increasing their own profit and brand value through purchases and sales. Discord could also be the test for other companies with similar communications technology to see whether or not it's worth following in Roblox's footsteps, or even going public.
Discord, as mentioned at the beginning, is growing at a tremendous rate. The company boasts over 140 million active users. And it's still growing. But this is offset by the finances. As the Wall Street Journal reported, while they saw a huge increase in revenue from $45 million in 2019, to $130 million in 2020, that's how every gaming-focused company fared in the Corona year of 2020.
So it would be too early for an IPO. Discord admitted in the same WSJ article, however, that it is far from profitable yet. Unlike Playtika. The Israeli company, which specializes in the development of mobile games, could only become profitable from a turnover of 2.37 billion dollars. At the same time, Playtika relies on microtransactions by default, while Discord does not set such hurdles for "customers" and you can enjoy Discord to the fullest extent for the most part for free.
In contact with dealmaker company
A source told Venturebeat that Discord has once again engaged Silicon Valley-based "dealmaker" firm Qatalyst. The latter previously handled Discord in 2018, when it was then up for sale and offers of between $2 billion and $6 billion were received. But at the time, Discord decided against the sale because the companies that made offers required Discord to engage in certain practices that it did not support as a company. Among them, for example, would be the placement of advertising. At the time, they felt the best way to protect the company's values was to remain independent. And since these values are very important to the leaders of Discord, no purchase could be made this time either.
An internal source, who did not want to be named, says that they currently see no reason why Discord should be sold. The company would be in a good position, they would have their fate completely under their own control.
Who might be interested in Discord
But since there is currently a bid of over 10 billion on the table, or at least credible sources are reporting it, one has to assume that this offer can only come from a major publisher like EA or Activision, or even from the major platforms Twitter, Facebook, Google or Microsoft. Accordingly, there is great concern among many smaller developers that the critical role Discord plays in linking players and developers could be abused by a third party for its own purposes. A sale would eventually turn Discord from the standalone company committed to all gamers into a subsidiary dependent on a large big-tech company.
If pressure could be put on Discord CEO Jason Citron from anywhere, it would come from companies that have previously bought into Discord. Among them are Greylock, IVP, Spark Capital, but also Tencent. While various interested parties have also recently put money into Discord, and Jason Citron was thus able to achieve over 450 million dollars for Discord, he still avoids placing advertisements in Discord. It would, in his estimation, simply harm the user experience. Instead, he relies on the "Nitro" subscription model. In doing so, it has definitely paid to include other communities besides gamers to increase revenue from subscribers.
Discord is able to convince mainly thanks to very good audio quality and thus continues to grow in popularity. But other competitors are gaining ground, including Clubhouse. However, whoever had control over Discord would prevent a coup by Clubhouse, which is why it could be particularly interesting for companies like Twitter and Facebook to enter the business here.
So the future of Discord is currently on a knife edge. And it will be interesting to see how the current situation around the company develops.
