Microsoft is rumored to be in talks to acquire the gaming-focused chat app Discord for over $10 billion, sources talking to Bloomberg revealed on Tuesday, March 23.
First reported by VentureBeat, Discord is looking at the option to put the company up for sale after rumors of several companies wanting to acquire the business.
The news comes after Discord's valuation shoots up to $7 billion in December 2020 after successfully raising $140 million in funding led by Greenoaks Capital in June 2020.
Microsoft - Discord Acquisition: What is Known So Far?
As reported, Discord is exploring the idea of selling the company for $10 billion, and they had already signed an exclusive acquisition discussion with one party.
Meanwhile, Bloomberg reported shortly after that a source claimed the deal would not happen anytime soon and that Discord might rather go public than seek an acquisition.
The report also spilled that both Amazon and Epic Games have held discussions with Discord in the past, and Xbox head Phil Spencer currently has the floor in the possible Discord acquisition.
Discord: Sell or go public?
Discord's decision to either sell or go public will fall entirely on the gaming-centric instant messaging app's founder and CEO, Jason Citron.
"I know they are in active discussions with a select few parties," a source speaking to VentureBeat said. "The market is in a state where they could command strong double-digit billions of dollars."
Though, there are still a lot of things to consider on the proposal, Discord being connected to Microsoft can affect Xbox projects soon. But, nothing is predicted yet.
As of this writing, both Microsoft and Discord had declined to comment about the acquisition rumors.
Discord's Journey to $7 Billion Valuation
According to Business of App's report on Monday, March 22, Discord has grown to more than 140 million monthly active users and 6.7 million active servers since its launch in May 2015.
Moreover, on December 17, 2020, Discord reached its most recent historic milestone when the gaming chat app reached a valuation of $7 billion after securing $140 million in funding, as first reported by Premium Unicorn Index.
Before all of the successes and the rumors of the Microsoft acquisition, Discord was nothing more than Citron's vision to introduce a modern approach to communication online.
What gave Discord the edge against its competitors is the user's option to join servers specifically dedicated to a game.
The company's rise came with the public's growing interest in e-sports when players from Fortnite and League of Legends opted to use Discord for a much more effective in-game communicating tool.
However, Discord's revenue only started picking up in 2018 when it launched a subscription service named Discord Nitro.
The service, which offers users larger upload size and server support, makes up most of Discord's revenue.
The company's success was also riddled with controversy when one of the servers was used by white supremacists to organize the Charlottesville, Virginia rally in 2017.
The controversy prompted Discord to start implementing verification and bot-moderation tools to weed out these types of groups.
This article is owned by Tech Times
Written by Lee Mercado