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Discord ceases talks on a possible buyout

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Posted on Apr 21, 2021 9:31 AM

Discord, a very popular discussion platform especially with video game enthusiasts, was in discussions with Microsoft for a transaction that would have valued it at more than $ 10 billion. These talks were interrupted and an IPO is now being considered, according to information from the “Wall Street Journal” on Tuesday confirmed by sources familiar with the matter at Bloomberg.

Other companies had expressed interest, including Twitter, according to Bloomberg. Discord had also traded with Epic Games and Amazon for a possible buyout in the past. According to the sources of the press agency, Discord would have been evaluated at 15 or 18 billion during these various discussions.

A privileged IPO

Discord allows you to exchange text, audio and videos. Although not profitable, it claims about 140 million monthly users and generated a turnover of about 130 million dollars in 2020, against 45 million the year before, according to the “Wall Street Journal”. The Covid-19 pandemic has allowed it to extend its messaging system beyond video game enthusiasts.

Building on this momentum, the free platform, based in San Francisco, is now focusing on a long-term public listing project, like several groups in the world of video games, according to sources familiar with the matter. Roblox, for example, took the plunge in March, and was thus valued at 38 billion dollars, while the last round of funding in January had increased its value to 29.5 billion.

Microsoft in search of expansion

For Microsoft, a merger with Discord would have made it possible to extend its presence, beyond LinkedIn, the professional network it bought in 2016. Discord is widely used by many fans of video games Xbox, Microsoft’s brand that spans consoles to mobile games and streaming services, which made a buyout all the more meaningful.

Microsoft has already announced other transactions. Earlier this month, he announced that he would buy speech recognition pioneer Nuance Communications Inc. in an all-cash transaction valued at $ 19.6 billion. Microsoft’s Xbox business has broadened the range of subscription benefits it offers as part of its Game Pass offer.

The company also sought to take ownership of social networks TikTok or even Pinterest, as it sought assets to access thriving user communities. Discussions which have so far not been successful.

With AFP and Bloomberg

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