The beginning of the chat Discord Inc. has stopped talks to sell to potential suitors, including Microsoft Corp.
MSFT -0.31%
, according to people who know the subject, as it is again interested in a possible initial public offering.
Microsoft had held advanced talks to acquire Discord for at least $ 10 billion, The Wall Street Journal reported last month. Some of the people said that these conversations ended without an agreement, although it is possible that they will recover in the future.
Microsoft, whose market value stood at nearly two trillion dollars on Tuesday, has been looking for acquisitions that would help it reach more consumers. Last summer he explored an offer to buy parts of the TikTok video-sharing app amid a high-profile geopolitical confrontation that propelled the Trump administration.
Some of the people said Discord generated interest from at least three companies for a deal. They said Discord is performing well and prefers to stay independent at the moment.
San Francisco-based Discord operates a free online platform for text, audio and video chat. Especially loved by gamers, its popularity has increased since the pandemic was consolidated, as people turned to it as a safe way to connect with friends and family.
Discord said last year it doubled its monthly user base, to about 140 million, as daily life moved online in the coronavirus pandemic. The company generated revenue of $ 130 million in 2020, up from nearly $ 45 million in 2019, although it is not yet profitable, the newspaper reported.
Launched in 2015, Discord doubled its valuation to $ 7 billion in a December funding round. Overall, the company has raised approximately $ 480 million, according to Crunchbase data. Investors include Greenoaks Capital, Greylock Partners and Index Ventures.
To an extent that could facilitate a IPO, Discord last month hired its first chief financial officer, Tomasz Marcinkowski, former Pinterest Inc.
executive. Although Discord is not a video game company, many of its users rely on it to communicate with each other while playing games, and several companies linked to the video game industry have gone public over the past year, including Roblox Developers Corp. and Playtika Holding Corp.
, manufacturer of gaming hardware Corsair Gaming Inc.
and provider of Unity Software game creation tools Inc.
Roblox made a direct listing last month and left behind the original plans to follow the traditional IPO route, after the video game company decided it was too difficult to determine the right price for its shares.
An agreement with Discord would have helped Microsoft expand its social media presence beyond LinkedIn Corp. and to what he has developed through his Xbox video game business. Discord users say the platform offers more attractive features, such as higher-quality audio than competing chat services, including even Xbox and Skype, which Microsoft also has.
In addition to last year’s failed TikTok talks, Microsoft gave up Mixer, its live video game streaming service that struggled to compete with Amazon.com Inc
Twitch, alphabet Inc
YouTube and Facebook Gaming.
The technology giant has made several acquisitions in recent years, most recently its proposed agreement for Nuance Communications Inc.
It invested $ 7.5 billion earlier this year in the purchase of video game company ZeniMax Media Inc., $ 7.5 billion in software development platform GitHub Inc. in 2018 and $ 26.6 billion on LinkedIn in 2016.
Write to Sarah E. Needleman to [email protected] and Cara Lombardo to [email protected]
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