Discord was said to have been in exclusive talks with Microsoft over an acquisition deal worth at least $10 billion, according to the Wall Street Journal. However, that deal is no longer on the table, with Discord shutting down negotiations, despite the bid being reported as high as $12 billion, according to Bloomberg. The publication reported that Discord denied interest from companies such as Amazon, Epic Games, and Twitter.
A deal with Discord would have helped Microsoft expand its social media presence beyond LinkedIn and Xbox. Many Discord users rely on the platform to communicate with each other while playing games and find it offers better audio and features than other Microsoft-owned offerings like Xbox and Skype.
San Francisco-based Discord is best known for its free service that surged in popularity during the pandemic. Now, the site is no longer a hub for just gamers, with people stuck at home during the pandemic using the platform for everything from study groups to dance classes and book clubs.
According to sources, Discord is focusing on a potential public listing in the long term. Several startups in the videogame industry have gone public recently, including developers Roblox, Playtika Holding, game-hardware maker Corsair Gaming, and game-creation tool provider Unity Software.
Last month, Discord announced that it had hired Tomasz Marcinkowski as its Chief Financial Officer, a move that could help facilitate a future IPO.
The startup claims to have doubled its monthly user base last year to over 140 million monthly users. The company is said to have generated revenue of $130 million last year, a significant increase from the nearly $45 million it pulled in during 2019. However, Discord is not yet profitable.
This is yet another deal Microsoft was trying to secure but fell through. In 2020, the tech giant was in discussions about a potential purchase of TikTok following the social media platform's security concerns that brought it under scrutiny from the Trump administration.