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Discord

Discord

Discord is an American company that offers users a free messenger with support for IP telephony and video conferencing. About 56 million people use the Discord messenger every month, and its total audience exceeds 270 million users.

Potential market and prospects

The popularity of the Discord messenger has grown significantly since the beginning of the pandemic. In addition to text messaging, the application allows you to organize voice and video conferences with detailed configuration of communication channels. Discord works on Windows, iOS and Android, there is also a browser version.

The advantage of the messenger is the lowest possible consumption of device resources, since it is initially designed for gamers to communicate and should not affect the quality of the game. In addition, Discord has occupied a niche that no company has ever claimed before — an ideal voice chat during the game.

The company plans to continue developing voice chats during the game, including working with popular PlayStation and Xbox gaming platforms.

Discord has also launched integration with YouTube in test mode. The Watch Together feature allows chat participants to watch videos together. Players can share screen images with each other while using a minimum amount of resources.

Financial performance of Discord

Discord is estimated at $15 billion after the next stage of financing in September 2021. The company's leading investor was Dragoneer Investment Group, which previously invested in Spotify, Uber and Snap.

Discord is thoroughly preparing for an IPO in 2022, but the official date of placement is still unknown. To increase the company's potential, investments were attracted for the development of the technologies used, and in the spring of 2021, the first financial director Tomasz Marcinkowski, who had previously worked at Pinterest, was hired.

History

The concept of Discord came from Jason Citron, who had founded OpenFeint, a social gaming platform for mobile games, and Stanislav Vishnevsky, who had founded Guildwork, another social gaming platform. Citron sold OpenFeint to GREE in 2011 for US$104 million, which he used to found Hammer & Chisel, a game development studio, in 2012. Their first product was Fates Forever, released in 2014, which Citron anticipated to be the first MOBA game on mobile platforms, but it did not become commercially successful.

According to Citron, during the development process, he noticed how difficult it was for his team to work out tactics in games like Final Fantasy XIV and League of Legends using available voice over IP (VoIP) software. This led to the development of a chat service with a focus on user friendliness with minimal impact to performance.

To develop Discord, Hammer & Chisel gained additional funding from YouWeb's 9+ incubator, which had also funded the startup of Hammer & Chisel, and from Benchmark capital and Tencent.

Discord was publicly released in May 2015 under the domain name discordapp.com. According to Citron, they made no specific moves to target any specific audience, but some gaming-related subreddits quickly began to switch their IRC links with Discord links. Discord became widely used by esports and LAN tournament gamers. The company benefited from relationships with Twitch streamers and subreddit communities for Diablo and World of Warcraft.

In January 2016, Discord raised an additional $20 million in funding including an investment from WarnerMedia (then TimeWarner). In 2019, WarnerMedia Investment Group was shutdown and acquired by AT&T, selling its equity.

Microsoft announced in April 2018 that it will provide Discord support for Xbox Live users, allowing them to link their Discord and Xbox Live accounts so that they can connect with their Xbox Live friends list through Discord.

In December 2018, the company announced it raised $150 million in funding at a $2 billion valuation. The round was led by Greenoaks Capital with participation from Firstmark, Tencent, IVP, Index Ventures and Technology Opportunity Partners.

In March 2020, Discord changed its motto from "Chat for Gamers" to "Chat for Communities and Friends", and introduced server templates. This was part of their response to an increase in users as a result of the COVID-19 pandemic.

In April 2020, Discord's Twitter username was changed from @discordapp to @discord.] Later in May 2020, Discord changed its primary domain from discordapp.com to discord.com.

Starting in June 2020, Discord announced it was shifting focus away from video gaming specifically to a more all-purpose communication and chat client for all functions, revealing its new slogan "Your place to talk", along with a revised website. Among other planned changes would be to reduce the number of gaming in-jokes it uses within the client, improving the user onboarding experience, and increasing server capacity and reliability. The company announced it had received an additional $100 million in investments to help with these changes.

In March 2021, Discord announced it had hired its first finance chief, former head of finance for Pinterest Tomasz Marcinkowski. An inside source called this one of the first steps for the company towards a potential initial public offering, though co-founder and CEO Jason Citron had stated earlier in the month he was not thinking about taking the company public. Discord doubled its monthly user base to about 140 million in 2020. The same month, Bloomberg News and The Wall Street Journal reported that several companies were looking to purchase Discord, with Microsoft named as the likely lead buyer at a value estimated at $10 billion. However, they ended talks with Microsoft, opting to stay independent.Instead, Discord launched another round of investment in April 2021. Among those investing into the company was Sony Interactive Entertainment; the company stated that it intended to integrate a portion of Discord's services into the PlayStation Network by 2022.

The old Discord wordmark (2015–2021)

In May 2021, Discord rebranded its game controller-shaped logo "Clyde" in celebration of its sixth anniversary. The company also changed the color palette of its branding and user interfaces, making it much more saturated, to be more "bold and playful". They also changed its slogan from "your place to talk", to "imagine a place", believing that it would be easier to attach to additional taglines; these changes were met with backlash and criticism from Discord users.

In July 2021, Discord acquired Sentropy, a company that specialized in using artificial intelligence systems to monitor online networks for abusive messages to highlight problematic users, and provide recommendations to users for the means to block such messages or users. With the acquisition, Sentropy's tools will be used exclusively for monitoring Discord servers to help with Discord's goals to prevent harassment of users.

Ahead of a new funding round in August 2021, Discord had reported $130 million in 2020 revenues, triple from the prior year, and had an estimated valuation of $15 billion. According to Citron, the increased valuation was due to the shift away from "broadcast wide-open social media communication services to more small, intimate places", as well as increased usage from the COVID-19 pandemic. They also captured users that were leaving Facebook and other platforms due to privacy concerns. Citron states that they are still in talks with several potential buyers including all major gaming console manufacturers.[36] From this, the company secured an additional $500 million in further investments in September 2021.

In September 2021, Google sent cease and desist notices to the developers of two of the most popular music bots used on Discord - Groovy and Rythm - which were used on an estimated 36 million servers in total. These bots allowed users to request and play songs in a voice channel, taking the songs from YouTube ad-free. Two weeks later, Discord partnered with YouTube to test a "Watch Together" feature, which allows Discord users to watch YouTube videos together.

Citron had posted mockup images of Discord around the proposed Web3 principles with integrated cryptocurrency and non-fungible token support in November 2021, leading to criticism from its userbase. Citron later stated that "We appreciate all the perspectives we’ve been hearing in response to the internal concept you may have seen in a tweet earlier this week and want to clarify we have no plans to ship it at this time. We’re excited about the potential for Web3 technology and the positive ways these communities are coming together on Discord, especially those organized around environmentally friendly, creator-focused projects. However, we also recognize there are some problems we need to work through. For now, we’re focused on protecting users from spams, scams, and fraud."

Timeline

May 13, 2021
Discord announces a new live audio feature that will put it in competition with Clubhouse and Twitter Spaces.
May 3, 2021
Sony Interactive Entertainment announces a partnership with Discord, the popular multi-format communication service.
May 2021
Discord has over 150 million users and 19 million active servers per week.
April 20, 2021
Discord ends talks for $10B acquisition by Microsoft
December 18, 2020
Discord raises $100 million in fresh funding.

December 21, 2018
Discord raises a $150,000,000 series F round from FirstMark Capital, Greenoaks Capital, Index Ventures and Tencent.
March 24, 2015
Discord was founded by Jason Citron.
2015
Discord is launched.

Funding Rounds

Acquisitions

Patents

Further Resources

Title
Author
Link
Type
Date

Discord

Discord Inc

16.02.2022

How to use Discord

Web

November 2, 2020

News

Title
Author
Date
Publisher
Description
Andrew Cunningham
September 29, 2021
Ars Technica
New MS Store will be more convenient (and useful) for users and developers.
Natasha Mascarenhas
September 1, 2021
TechCrunch
Welcome back to TechCrunch's continuing coverage of Y Combinator's Summer 2021 Demo Day! This is Day Two. If you haven't caught up yet on what happened during the first day, you can read our recap of all the presenting companies here, our favorites from that first set here, and a quick podcast about all of [...]
Lucas Matney
August 16, 2021
TechCrunch
Roblox is using M&A to bulk up its social infrastructure, announcing Monday morning that they had acquired the team at Guilded which has been building a chat platform for competitive gamers. The service competes with gaming chat giant Discord, with the team's founders telling TechCrunch in the past that as Discord's ambitions had grown beyond [...]
Brian Contreras
August 5, 2021
Los Angeles Times
Teleparty and other "remote entertainment" platforms went mainstream when the world locked down. But do they have a future beyond the pandemic?
Taylor Hatmaker
August 3, 2021
TechCrunch
For mobile users, Discord is adding one new feature that you'd find on a more traditional social app. The company rolled out an option for users to customize their profiles across its iOS and Android apps Tuesday, following the feature's release on the desktop version of Discord in late June. The new option lives in [...]
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References

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