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Discord is an online communication platform featuring text messaging, audio and video communication, streaming integration, and other ways to interact. The platform was initially a hit with gamers but has become a communication tool for all kinds of communities. When the COVID-19 pandemic forced much of our interaction online, Discord was one of the big winners.

But much of that communication remains online, prompting investors to buy Discord stock. For now, the company is not public, so these shares are not yet available for purchase. Learn more about this company and why you might want to consider investing if we see an initial public offering from Discord soon.

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Discord Details

Discord was co-founded in 2015 by Jason Citron and Stan Vishnevskiy. Back then, their mission was surprisingly simple: to help friends communicate while playing online games. But they found existing tools “slow, unreliable and complex”. Discord therefore decided to create a communication platform that would help them achieve this goal.

When launched in 2015, the app was an instant hit with gaming communities. Discord is available on almost all platforms including Windows, iOS, Android, web browsers, and game consoles such as PlayStation and Xbox. This compatibility has helped propel its success.

In 2020, Discord began to position itself not just as a communication platform for gamers, but for all types of online communities. As a result, it now has 150 million monthly active users and 19 million weekly active users. Discord is based in San Francisco, California, and has 600 employees worldwide.

Why do people want to invest in Discord?

Why are investors considering Discord stocks? Discord is one of the most popular real-time communication platforms today and has carved out quite a place for itself in the online world. While other tools do some of the same things as Discord, they tend to be less comprehensive, aren’t as user-friendly, or simply don’t have Discord’s support.

As the company quickly became one of the most popular communication platforms, it made key hires from other tech companies which undoubtedly increased interest in the company. In March 2021, Discord hired Tomasz Marcinowski, former chief finance officer of Pinterest to lead its finance operations. Then, in December 2021, he welcomed former Microsoft executive Liz Hamren as the new COO.

And there is more to say about Microsoft. In March 2021, Bloomberg reported that Microsoft was in talks to buy Discord for an estimated $10 billion. Less than a month later, a Bloomberg report said Discord had rejected a $12 billion offer from the tech giant. Discord has also received takeover offers from Amazon and Twitter.

After rejecting Microsoft’s offer, Discord is considering the possibility of becoming a publicly traded company. Although not much is known about a potential IPO, the company has ample liquidity and is well positioned to go public in the near future.

Discord has completed its funding rounds to bolster its cash reserves. For example, it received its first cash injection of $20 million in 2016. In 2018, it got $150 million and was already valued at over $2 billion after just three years. At the end of 2021, it raised $500 million, and by then its valuation had jumped to $15 billion. This more than doubled the $7.3 billion valuation claimed after its previous funding round in December 2020.

Discord has many notable backers, including Spark Capital, Benchmark, IVP, Greenoaks Capital, Tencent Holdings, Index Ventures, and Greylock Partners.

Reasons to invest in Discord

If you’re looking for a quality stock to add to your portfolio, Discord could be a wise investment if the company decides to go public. Because it’s still a private company, you don’t quite have the transparency that you have with public companies in the form of quarterly reports and earnings calls. However, some figures available give the image of a financially healthy company.

For example, in 2021, The Wall Street Journal reported that Discord grew its revenue from $45 million in 2019 to $130 million in 2020. Most of Discord’s revenue comes from its Nitro subscription, which users can purchase for $9.99 per month or $99.99 per year. Despite the increase in revenue, we may have to wait for the company to go public to find out if that translates into profitability.

Nonetheless, Discord can be a smart investment as it is an industry leader and arguably has no direct competitors. Other platforms such as Slack have similar functionality but have a business purpose. Therefore, at least for now, Discord could continue to grow its user base and subscription revenue.

Benefits of Buying Discord Stock

  • Opportunity to invest in a growing business

  • Take advantage of the growing trend of remote communication

  • Currently little direct competition

Reasons not to invest in Discord

While Discord has a lot to offer, we can’t say for sure that it will be a good investment if the company goes public. For one thing, we don’t know enough about its fundamentals to determine whether it makes sense to invest.

For example, while Discord’s revenue tripled from 2019 to 2020, it’s not yet known if it’s bringing in enough to be profitable. Since it makes most of its money from subscriptions, its sources of income are somewhat limited. Notably, the company has an ad-free business model. This may be good for the user experience, but it won’t help Discord be more profitable.

Also, things are going well for Discord right now, but as mentioned, there isn’t much direct competition at the moment. Discord’s original mission was to help friends communicate while playing online games. While this has spread to all online communities, there’s little to stop a competitor from developing their own platform that includes all of Discord’s features – and, perhaps, making it even better.

Discord has also been the subject of controversy. For example, Discord gained popularity among alt-right groups in 2017 and was used to plan the Unite the Right rally in Charlottesville, Virginia, among other extremist protests. Discord only became aware of the use of the platform for this purpose after the gathering.

How Discord handles controversies has implications for how its users feel about the platform. Those who feel that there is not enough effort for certain activities on Discord may choose to go elsewhere. It’s worth noting that Discord acquired startup Sentropy in 2021, a company that makes AI software with the aim of monitoring and removing online harassment.

Cons of Buying Discord Stock

  • Uncertainty about Discord’s profitability

  • Future competition could be a threat

  • The controversial use of the platform poses a risk

When to expect a Discord IPO

Discord hasn’t officially announced an IPO or indicated when it might start trading. However, Bloomberg reported that the company plans to go public as soon as 2022, with the possibility of the date being pushed back to 2023. Discord is reportedly weighing its options, meeting with investment banks to take the company public. It’s also considering direct listing, which companies like Spotify and Slack have already done successfully.

At this point, we know very little about the details of a possible Discord IPO other than that the company has expressed interest in the possibility. Its most recent valuation puts an estimated $17 billion price tag on the company.

How to buy Discord shares

Since Discord is currently not public, you cannot simply invest by visiting your favorite broker. In the meantime, one possibility is invest money in one of the many Discord backers that are publicly traded today. These include FirstMark Capital (FMAC) and Tencent Holdings (TCEHY).

Another option for retail investors is to invest in similar companies available on the stock exchange. For example, you can buy shares of Slack (WORK). You can also consider Microsoft (MSFT). Even though Microsoft failed to acquire Discord, it does offer similar products, such as Skype and Teams.

If you want to invest in any of these listed companies, you will need an investment account. If you don’t have one yet, check out our list of best investment apps and best brokerage accounts.

Finally, if you’re set on investing in Discord now, some trading platforms offer pre-IPO trading, such as EquityZen and Forge. If Discord does eventually announce an IPO, you may be able to secure some pre-IPO action on those platforms before the company officially goes public. For more details see our EquityZen Review.

FAQs

What is Discord’s ticker symbol?

Because Discord hasn’t gone public yet, it currently doesn’t have a ticker symbol.

Is Discord a public company?

For now, at least, Discord is a private company, not a public one. That means you won’t find it on an open exchange.

How to buy shares pre-IPO?

Besides private equity, there are several ways to buy stocks before the IPO. This includes buying from a pre-IPO broker and buying shares in publicly traded venture capital firms.

At the end of the line

Discord may not be public yet, but it’s not standing still. In 2021, he added more updates than ever to his Nitro subscription. He said in a blog post that he added 300 Nitro-specific stickers as he sought to bring more value to his followers.

If you want to become a Discord investor, keep an eye out for an official IPO announcement. In the meantime, your best bet is to research it on pre-IPO investment platforms or invest in Discord backers such as FirstMark Capital.

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