Released in 2015, Discord is an instant messaging platform that lets you text, video, and voice chat with friends and communities online. It's one of the most popular chat apps in the industry, with over 390 million registered members at the time of writing.
Because of its massive popularity, thousands of investors look forward to Discord going public. But when is the Discord IPO, and what's its valuation?
The Discord IPO date has yet to be officially announced. Previous reports state that it'll happen sometime between late 2021 and early 2022, but 2022 has come and gone without confirmation. So, what gives? Is Discord stock even going to go be made available to the public?
Let's find out.
Brief Overview of Discord's Popularity and Financial Growth
At the time of its release, Discord was often described as the lovechild of Skype and TeamSpeak. Neither app was "great" by any stretch of the imagination, so Discord was expected to have a lifespan of no more than a couple of years.
That statement couldn't be more wrong, as Discord generated an influx of traffic from the get-go.
Though similar to other chatting apps, Discord had one feature that made it stand out from the rest: the ability to create unmoderated private servers. With rising concerns about privacy and user data miss management, this feature alone was enough for people to give Discord a shot.
As the company grew, it opened its doors to external funding, with the earliest being a $20 million investment by Warner Media. This attracted significant investment from other well-known companies, such as Benchmark, IVP, Spark Capital, Tencent, and Index Ventures.
The first round of funding raised $50 million, which cemented Discord as one of the most successful chat launches of all time. Subsequent rounds of funding raised $150 million (2018), $200 million (2020), $503.3 million (2021), and $10.9 million (2022).
Discord is currently funded by 31 investors, with Arcane Group and Flat Capital being the most recent. The chat service has raised a total of nearly $1 billion in funding over 16 rounds.
Aside from financial investments, Discord has developed strategic partnerships with big-name companies to increase its visibility in the industry further. These include:
● Partnership with Spotify to allow users to share their Spotify playlists and listen to music while on the app
● Partnership with YouTube to create a "Watch Together" function, which allows users to watch YouTube videos while on the app
● Partnership with Microsoft, allowing users to communicate with gaming friends in Discord through Xbox live
● Partnership with Twitch, allowing users to integrate their Twitch channel into their Discord server
Discord has also acquired several companies, including Sentrop Technologies (an AI that helps moderate online communities), Ubiquity6 (a computer vision software that allows users to browse augmented reality content), and Blitz (a data-driven AI designed for professional gamers).
When Is the Discord IPO?
The company enjoyed steady growth for years but saw a sharp rise in valuation in 2020 due to the onset of COVID-19 and the rising concerns about online privacy.
With nearly 400 million users—150 million of which are active monthly users—an IPO seems imminent.
However, Discord has yet to confirm its intention to go public.
The company was initially speculated to go public in 2022, but since 2022 went by without news from Discord, the predicted release date has been moved to 2023.
The exact date is, unfortunately, anyone's guess.
Is There Ever Going to Be a Discord IPO?
Despite no announcements of the Discord IPO, it remains one of the most anticipated listings out there. But this begs the question: is there actually going to be a Discord IPO in the near future, or is the wait for nothing?
According to experts, a listing is highly likely for several reasons. These include:
Funding Rounds and Interviews With Investment Bankers
The sale of Discord stock raised over $500 million in a funding round in 2021, doubling its valuation of $7.3 billion in 2020.
There have also been reports stating that the company has held interviews with investment bankers to discuss the possibility of a direct listing.
Discussions of direct listing often open up the conversations of initial public offerings, so Discord might go for that route if it better suits their needs.
The hiring of Big-Name Execs
In 2021, Microsoft reportedly offered $12 billion to buy out Discord, but the company refused—just like how it turned down Twitter, Amazon, and Epic Games.
Instead, it hired former Pinterest executive Tomasz Marcinkowski as a CFO. This was taken as a strategic step towards an IPO because it was he that led Pinterest's successful public offering in 2019.
Several months later, Discord added Leslie Kilgore—ex-Netflix executive—and Amrita Ahuja—former Block CFO—to its executive committee. Then, in December 2021, it introduced former Microsoft executive Liz Hamren as its new COO.
Discord's decision to hire so many high-profile senior execs in such a short period of time has led experts to conclude that Discord's IPO could happen soon, as soon as early 2023.
After all, these executives have worked for public companies in the past and have more than enough experience to deal with the IPO market.
While none of these actions solidifies Discord's intention to go public, other companies have done the exact same before issuing an IPO.
What Will Discord's Valuation Be at the IPO?
According to PitchBook, Discord's valuation in 2021 is around $15 billion, more than double its valuation of roughly $7 billion in the year prior.
That said, Fidelity—a Discord investor through Contrafund—lowered its discord shares by approximately 32%. It went down to $373.65 from $550.62 a share in a span of just a month.
The actual Discord valuation will be released once it decides to go public, so take these figures with a grain of salt.
Should You Invest In Discord?
If Discord decides to go public, there are several reasons why you should consider adding it to your portfolio.
Discord is one of the most financially healthy companies out there—at least on paper.
Discord is a private company, so experts have yet to access its quarterly reports and earnings statements. However, the reports that are available paint it to be a company that can easily sustain itself for many years to come.
For example, a Wall Street Journal report states that Discord increased its revenue nearly three-fold in 2020 from 2019, from $45 million to a staggering $130 million.
Most of Discord's revenue comes from its Nitro subscription, which is $9.99 per month or $99.99 per year. There are somewhere between 5 to 10 million Nitro users a year, which earns Discord an easy $25 to $75 million a month.
Apart from Nitro, the company earns a 10% commission on every game it sells with partnered developers.
It also offers server boosts, which essentially improve the performance and functionality of the server.
Server boosts cost $4.99 per month. Nitro subscribers get an additional 30% off the service.
Discord is one of the fastest-growing companies to date.
In the wake of the pandemic, Discord increased revenue by 188%—and the trend seems to go up from there.
Currently, there are over 19 million active servers on Discord per week and 150 million users per month.
In the US, Discord ranks second in iPad and fourth in iPhone in the Top Grossing Social Networking chart. It also earned itself the title of one of the most downloaded free apps on the iPad store in December 2021.
The same report applies in the UK. In the UK, it ranks fifth in the "Best Free Social Networking App" category of iPhone, iPad, and Android.
Japan, too, placed Discord as the second and fifth Top Free Social Networking App for iPad and iPhone, respectively.
Not Just a Chatting App
Though Discord is advertised as an app where you can chat with your gaming friends, it's more than just a chatting app.
It also enables file sharing, voice communication, and other features.
Many apps provide similar capabilities, but Discord has several notable features that set it apart from other applications in the industry.
Firstly, it's compatible with nearly any platform. Alongside iOS and Android, it can be accessed on Windows, Mac, Playstation, Xbox, and others.
Another notable feature is that it enables the creation of private groups and communities called "servers" that are subdivided into channels.
In these channels, users can screen share and communicate live with other server members while gaming, streaming, listening to music, or watching TV shows/movies.
Most of Discord's users come from gaming communities, but the company is rapidly expanding into non-gaming markets.
In fact, professional groups started using Discord as an alternative to Zoom, Slack, Teams, Google Meet, and other communication apps because of its ease of use and high video and sound quality.
Analysts are confident that Discord's users will stay with the app even when similar apps are released. Instead of abandoning it, users will likely find new uses for it.
How to Invest In the Discord IPO
Discord still hasn't gone public, so you can't "officially" invest in Discord just yet.
You'll be able to buy shares in the open stock market just like any other company when it's publicly listed.
Discord is believed to go public in 2023, so you have enough time to analyze the company's performance in the market.
Once Discord releases the IPO date, you'll be able to access its quarterly financial statements to give you more insight into whether it's worth investing in.
For the best chance of purchasing Discord stock early on, sign up with eToro, as they will make it available to you at the earliest possible opportunity.
If you are in the US, you can get access to upcoming new listings with eToro, register here.
For the rest of the world, to acquire this stock as soon as it is available, register here.
If you are in India, Canada or one of the other countries that eToro does not allow accounts to be opened in, or if you are interested in Global new listings and leveraged trading, then your best bet is to sign up with SwitchMarkets here, they also offer a 100% credit bonus of up to $5,000.
Can You Invest In Discord Pre-IPO?
There's no guarantee that you can invest in Discord pre-IPO. However, there are pre-IPO markets that could potentially have Discord stocks available before its public release.
For the uninitiated, a pre-IPO is a private sale of large blocks of shares that are typically bought out by hedge funds, private equity firms, and other institutions with enough cash to buy large stakes in the firm.
However, your best bet is to sign up with Etoro, who will make stock in Discord available to you at the earliest opportunity.
Discord has yet to announce its official IPO date or its intention to go public. However, experts predict that the IPO will go live sometime in 2023.
Discord's estimated valuation is somewhere around the $15 million mark, but it's subject to change so take it with a grain of salt.
The information in this article is well-researched and factual. Still, it contains opinions also, and IT IS NOT FINANCIAL ADVICE and should not be interpreted as such, do not make any financial decisions based on the information in this article; we are not financial advisors. We are journalists. You should always consult with a professional before making any investment decisions.
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