Chatting app Discord, which is widely popular among gamers, has doubled its valuation, following a $500 million fundraiser.
The company now stands at a valuation of $15 billion, having successfully closed the funding round led by San Fransisco-based tech market investment group Dragoneer Investment Group. Fidelity Managment and Research, Coatue Management, Franklin Templeton, and Baillie Gifford also participated in the financial round.
Rejected Many Acquisitions
This comes even after the platform, which boasts a user base spanning some 150 million monthly active users, has been declining tech giant Microsoft’s offers for an acquisition for months. The deal, which had seen Microsoft offer $12 billion for acquiring the rights to the service, went cold in April this year. Amazon and Epic Games had been other contenders.
Successful Endevours
The latest round is barely $100 million less than the sum total of all its previous fundraisers, which come in at around $600 million. It had previously raised $45 million in 2019, and another $130 million last year. Another $100 million had come in around December 2020, valuing the San Fransisco-based firm at $7 billion, a valuation that has more than doubled now.
Discord has, for the past few years, been trying to do away with its image of being a a haven for gamers, trying to poise itself as a more generalized chatting app. The $500 million funding is said to have bought about 3.3 percent of the firm’s stakes.
Microsoft had, not to long ago, taken over Minecraft parent Mojang in a deal worth $2.5 billion, and has also acquired Bethesda for a sum worth $7.5 billion. Meanwhile, Amazon had acquired podcasting and livestreaming platform Twitch for $1 billion as early as 2014, with the company currently being valued at just below $4 billion.
With Great Fundings Comes Great Concerns
Discord’s Founder and CEO Jason Citron had said just last month that the firm was eyeing a valuation of $15 billion, and looks like the group has managed to do just that.
At the same time though, experts are concerned that such large fundings can end up creating a firm paywall around Discord’s services, which appeal to millions of people who get to enjoy (most of) them for free. Since such a model isn’t very healthy for business, though, it is expected that sooner or later, quality will suffer. Some believe that the platform may start demanding a higher fees in return for access to features, and cut back on the feasibility of the features that continue to remain available for free. It’s also expected that this will lead to a crackdown on fake discord member services.
Source: Bloomberg
