UPDATED 10:36 EDT / MARCH 23 2021

APPS

Messaging platform provider Discord reportedly exploring sale to Microsoft at $10B

Messaging platform provider Discord Inc. is exploring a sale that could value the company at $10 billion, and Microsoft is reportedly leading the suitors.

That’s according to reports Monday from VentureBeat, which first reported Discord’s plans, and Tuesday from Bloomberg, which reported Microsoft’s involvement.

One of Bloomberg’s sources said the talks were early and there’s no imminent deal. Indeed, the San Francisco-based company hired a chief financial officer this month, often seen as a prelude to an initial public offering of stock.

A deal to buy Discord would plunge Microsoft, already a gaming powerhouse with its long-running Xbox consoles, even deeper into games, which have boomed during the pandemic. Last September, Microsoft bought ZeniMax Media Inc., which owns several significant game studios, for $7.5 billion. And it bought “Minecraft” publisher Mojang AB for $2 billion back in 2014.

The VentureBeat report, referencing two people familiar with the matter, said Discord is exploring its options in the wake of interest from multiple parties that want to buy the company. One of VentureBeat’s sources said Discord has signed an exclusive acquisition discussion with one party, meaning it could be in final negotiations. Presumably that party is Microsoft.

Founded in 2012, Discord offers a voice, video and text communications service that allows users to talk and hang out with friends. A modern take on traditional web forums, the service was originally created for the computer gaming community but has since expanded to a far wider audience.

Discord was once smeared as being a “safe space for white supremacists,” but it has since overcome that reputation and grown quickly.

The company has found willing investors. According to Crunchbase, Discord has raised $479.3 million to date and includes among its investors Index Ventures, Spark Capital, FireMark and Greenoaks Capital. It last raised $100 million on a $7 billion valuation in December.

Discord currently has 140 million active monthly users. Although difficult to compare given the different metrics used, Twitter by comparison has 192 million monetizable daily users with a market cap of $52 billion.

Who may be interested in buying Discord is purely open to speculation. VentureBeat noted that it’s likely to be either a really large game company or a platform owner such as Microsoft Corp., Amazon.com Inc., Twitter or Google LLC.

Jez Corden at Windows Central made the argument that Discord would be a perfect fit for Microsoft because the company’s existing messaging products are lacking. “Microsoft is a lumbering corporate giant and often fails to meet the pace of innovation smaller, more nimble teams can accomplish,” Corden wrote. “Few others represent this as succinctly as Discord, which not only destroys Skype and Xbox Live at texting, mobile quality and usability but arguably is even better than Microsoft Teams as an environment for professional use.”

With reporting from Robert Hof

Image: Discord

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