Chat app startup Discord raises $500M in new funding after walking away from $10 billion sale talks with Microsoft

Popular video-game chat community app Discord has raised $500 million in new funding round five months after walking away from $10 billion sale talks with Microsoft. The deal values the company at about $15 billion according to a report from Bloomberg News but Discord declines to comment on the valuation.

The round was led by investment firm Dragoneer Investment Group, with participation from Baillie Gifford & Co, Coatue Management, Fidelity Management & Research Co. and Franklin Templeton, alongside existing investors, a company spokesperson said on Wednesday.

As you may recall back in March, we wrote about Discord after a report that Microsoft was in talks to acquire the popular video-game chat community app Discord for more than $10 billion. If the deal had gone through, it would have been the latest—and biggest—play Microsoft has made to expand its gaming business, following the $7.5 billion purchase of Bethesda last year and the $2.5 billion deal that scored the company the hit game “Minecraft” in 2014.

Then in April, The Wall Street Journal reported Discord has suspended the talks to sell itself to potential suitors including Microsoft, according to people familiar with the matter. The nine-year-old startup will stay as a private company as it resumes interest in a potential initial public offering down the line.

Discord is best known for its free service that lets gamers communicate by video, voice, and text. The platform became very popular last year as people who were stuck at home during the pandemic turned to Discord for study groups, dance classes, book clubs, and other virtual gatherings. Discord platform also includes an invite-only place with plenty of room to talk.

Discord was founded in 2012 by Jason Citron and Stanislav Vishnevskiy as an online voice, video, and text communication platform designed for creating communities. About a month ago, the San Francisco-based Discord hired Tomasz Marcinkowski as its chief financial officer as part of the company’s effort to grow its revenue after a year of pandemic-fueled growth. Discord is an online voice, video, and text communication platform designed for creating communities.