Chat App Discord Drops Talks With Microsoft

Silicon Valley chat startup Discord is abandoning acquisition talks with Microsoft as the startup moves toward remaining independent and resuming interest in a potential initial public offering (IPO), The Wall Street Journal (WSJ) reported Tuesday (April 20).

Microsoft had looked to acquire Discord for at least $10 billion, and talks could be revived, WSJ reported, citing unnamed sources. A deal for Discord could have helped Microsoft expand its presence in social media beyond LinkedIn.

Launched in 2015, Discord had at least three firms nipping at its heels for a deal, according to WSJ. Valued at almost $2 trillion, Microsoft is looking to acquire firms that would help it leverage new customers. It previously looked into acquiring a majority stake in TikTok.

Discord’s free online platform for chatting by text, audio and video has been especially loved by gamers, who rely on it to communicate with each other while playing video games. Its new popularity was fueled by the pandemic, WSJ reported.

The chat startup doubled its valuation to $7 billion in a December funding round and has overall raised about $480 million, WSJ reported, citing Crunchbase data. Investors include Greenoaks Capital, Greylock Partners and Index Ventures.

Discord hired Tomasz Marcinkowski in March to serve as the company’s first finance chief, WSJ reported. Marcinkowski is a former executive with Pinterest.

Last month, Discord moved to introduce features akin to the privately-held social media audio platform Clubhouse, PYMNTS reported. Discord’s new program called Stage Channels will let users easily manage voice chats with up to 1,000 members.

Microsoft moved to acquire Discord in March.

In other Microsoft news, the company’s Xbox Cloud Gaming service, which is sort of a Netflix for games and was known previously as xCloud, is debuting on iPhones, iPads and personal computers (PCs) this week. The service will be invite-only in the beginning, and the rollout will continue to 22 countries in total.