Discord Valuation: Reportedly Close to $7 Billion Funding Round

Discord, a communication platform that has emerged as a central online hub for communities, is nearing the completion of a new funding round, potentially valuing the company as high as $7 billion, as reported by sources familiar with the negotiations.

This latest investment follows a $100 million funding injection received just months prior, which had already established a company valuation of $3.5 billion. Discord’s significant increase in worth coincides with the ongoing and, at times, ineffective American response to the COVID-19 pandemic, which has accelerated the growth of businesses focused on creating virtual social connections.

This growth is clearly reflected in Discord’s user base. The number of monthly active users has nearly doubled to 120 million this year, with approximately 800,000 daily downloads. This surge is partly attributable to the popularity of the game Among Us, which received a notable endorsement from U.S. Representative Alexandria Ocasio-Cortez.

Discord initially gained prominence within the gaming community, becoming a key platform for multiplayer, cross-platform games and effectively replacing earlier social networks as the primary online gathering place for a growing global population of gamers – a number that now exceeds several billion.

However, as the company’s leadership highlighted during their previous funding announcement, Discord’s applications have broadened considerably beyond gaming.

“We’ve observed that, for many of you, the platform’s utility extends beyond video games,” stated co-founders Jason Citron and Stanislav Vishnevskiy in a blog post published in July to announce the recent financing.

The founders describe their platform as “a space designed for connecting and conversing within your own communities and with friends.” They emphasize that Discord is “a venue for authentic interactions and meaningful time spent with others, whether it’s for catching up, learning, or exchanging ideas.”

This concept resonates with early internet users, as it mirrors the functionality of multiuser dungeons (MUDs) from the web’s early days. MUDs allowed individuals with shared interests to connect online and discuss topics of mutual interest.

While the internet now offers numerous avenues for online interaction, Discord appears to have distinguished itself from many others.

Analyst John Koetsier, writing in Forbes in 2019, reported that Discord already had 250 million users sending 315 million messages each day. These figures represent the company’s statistics prior to the pandemic and are noteworthy in any context.

Like any widely used online platform, Discord faces challenges related to undesirable content. The company attempted to remove users engaged in hateful behavior three years ago, but the persistence of hate speech on the platform remains a concern.

Until 2019, white nationalists were actively using the service, leading to a mention from Andrew Anglin, the founder of the Daily Stormer, who encouraged his followers to utilize the platform.

“Discord is consistently present within these far-right groups,” explained Joan Donovan, lead researcher on media manipulation at the Data & Society Research Institute, in a 2018 interview with Slate. “It serves as the primary location for organizing doxing and harassment campaigns.”

To date, Discord has secured $379.3 million in funding, according to Crunchbase, from investors including Greylock, Index Ventures, Spark Capital, Tencent, and Benchmark.

Alongside the recent funding, Discord has focused on enhancing the user experience and incorporating video capabilities to facilitate easier communication and compete with platforms like Zoom. The company has introduced server templates to assist users and increased voice and video capacity by 200%.

As part of this renewed focus, Discord has launched a “Safety Center” that clearly outlines the platform’s policies and provides users with tools to report and manage instances of hate speech and abuse.

“We are committed to taking strong action against white supremacists, racists, and anyone who attempts to misuse Discord for harmful purposes,” the founders stated in June.

Danny Rimer, co-founder of Index Ventures, who led the investor group behind Discord’s latest $100 million investment, has been a proponent of the company’s broader vision.

“I am confident that Discord represents the future of online platforms because it demonstrates how a carefully managed site can provide a secure environment for individuals with common interests,” Rimer wrote in a statement. “Unlike platforms like Facebook that present unfiltered content, Discord fosters a shared experience for you and your network. We will increasingly value Discord’s ability to facilitate social conversation in the same way Slack has transformed professional communication.”

Current investment trends suggest that investors are reinforcing this perspective.