According to Bloomberg Business, Discord Inc. has filed confidentially for an initial public offering, adding to a growing pipeline of tech listings. The San Francisco-based company, which boasts over 200 million monthly active users, is working with investment banks Goldman Sachs Group Inc. and JPMorgan Chase & Co. on the potential listing, though deliberations are ongoing and it could still decide not to proceed. The company was valued at about $15 billion in a 2021 funding round led by Dragoneer Investment Group, and notably rejected a $12 billion takeover offer from Microsoft Corp. earlier that same year. In April 2024, Humam Sakhnini, former vice chairman of Activision Blizzard, took over as CEO from co-founder Jason Citron, who remains on the board. The confidential filing comes as US tech IPOs raised $15.6 billion last year, more than double the amount from 2024.
The Gamer Chat App, All Grown Up
Here’s the thing about Discord: it started as a niche tool for gamers to coordinate raids, but it’s become something so much bigger. Basically, it’s the digital town square for countless online communities, from investing clubs to beatboxing enthusiasts. The core product is still free, which is a huge part of its appeal and growth to over 200 million users. But the real business story is its paid Nitro subscription, which offers enhanced features. That’s the revenue engine an IPO will scrutinize. Can they convert enough of that massive, casual user base into paying subscribers? That’s the billion-dollar question—literally.
IPO Roadblocks and Regulatory Scrutiny
An IPO isn’t just a victory lap; it’s a spotlight. And for Discord, that spotlight will shine brightly on some persistent challenges. The company has faced significant pressure from state governments over child safety on its platform. It says about 15% of its staff works on safety initiatives, using machine learning and community moderation, which you can read about in its safety commitment. But is that enough for public market investors and regulators? Probably not. They’ll demand more concrete plans and possibly more investment in this area, which could eat into profitability. And let’s not forget the Microsoft of it all. Turning down $12 billion was a bold bet on independence and a higher future valuation. The IPO is the moment that bet gets called. If the public markets value them at less than that offer, it’ll be a tough narrative to manage.
What an IPO Means for Everyone Else
So what happens if Discord goes public? For users, the immediate change might be minimal. But the pressure to grow revenue and please quarterly earnings will be immense. I think we’ll see a much more aggressive push for Nitro subscriptions and potentially more ads or sponsored integrations. For developers building bots and tools on Discord’s platform, it could mean a more stable, but also more corporatized, environment. And for the broader tech market, a successful Discord IPO would be a huge signal. It’s a beloved but not-yet-hugely-profitable consumer social platform. If it flies, it could open the floodgates for other similar companies waiting on the sidelines. But if it stumbles, it could remind everyone why many tech firms have stayed private for so long.
