DISCORD

Investment Tagline: Leading communication platform revolutionizing online communities with 150 million monthly active users

ABOUT DISCORD

Discord is a versatile communication platform that brings people together through voice, video, and text chat. Founded in 2012 by Jason Citron and Stanislav Vishnevskiy, Discord was originally designed for gamers but has expanded to serve diverse communities worldwide. With over 150 million monthly active users and 514 million registered users as of January 2023, the platform has become a prominent player in online communication.

The platform features voice channels, private messaging, customizable servers, and moderation tools, providing an interactive space for building communities. Discord's integrations with Twitch, YouTube, Spotify, GitHub, and Midjourney enhance user experience. The company nearly tripled its monthly active users during COVID-19, from 56 million in 2019 to 150 million by 2022, demonstrating a CAGR of 137% between 2018 and 2022. Discord generated $445 million in revenue in 2022 (CAGR of 115% since 2019) and notably rejected a $12 billion acquisition offer from Microsoft in April 2021, signaling strong independent growth potential.

MAIN SOLUTIONS/PRODUCTS

KEY INVESTMENT FEATURES

• Exceptional User Growth: Discord's monthly active users grew from 10 million in 2017 to 150 million by 2022, representing a CAGR of 39% and nearly tripling during COVID-19. With 514 million registered users and a global presence, over two-thirds use Discord for non-gaming purposes, demonstrating successful platform diversification beyond its gaming origins.
• Strong Revenue Growth: Revenue increased 10x from 2019 to 2022, reaching $445 million with a CAGR of 115%. Discord's ARPU of $3 surpasses comparable platforms including WhatsApp ($2.8), Snapchat ($1.7), and Reddit ($0.5), with growth driven primarily by a 54.6% ARPU CAGR.
• Valuation Momentum: The company's valuation grew 18x from $800 million in 2017 to $14.7 billion in September 2021. Discord rejected a $12 billion Microsoft acquisition offer in April 2021, signaling strong conviction in independent growth potential.
• Technology Leadership: Discord offers seamless integrations with cutting-edge technologies including Midjourney for AI-generated images, gaming platforms, and content services. Strategic acquisitions enhance community safety, engagement, and market positioning while maintaining rapid innovation cycles.

MARKET OPPORTUNITY

The social media and gaming communication market represents massive growth opportunity. Social media users reached 4.8 billion in 2023, up from 3.3 billion in 2019, while daily engagement increased from 90 minutes to 147 minutes. The gaming market has over 3 billion gamers globally, with the US market exceeding $90 billion and projected CAGR of 39%.

COVID-19 accelerated the shift to remote communication and digital communities. Discord's positioning at the intersection of social media, gaming, and niche community building places it strategically within these high-growth markets, with over 19 million servers hosting 4 billion daily messages demonstrating deep engagement and platform stickiness.

STRATEGIC ADVANTAGES

Technology Advantages: Discord is purpose-built as a scalable platform for online communities of all sizes. The rich ecosystem of bots, integrations, and add-ons enriches user experience while demonstrating quick adoption of new technologies like AI. The Midjourney integration allows users to generate AI images directly within Discord, creating competitive advantages and high switching costs.

Distribution Advantages: Discord's freemium model drives viral adoption with 150 million monthly users creating powerful network effects. Strategic integrations with Xbox, YouTube, Spotify, and GitHub expand distribution reach and enhance stickiness. The platform's customizable servers allow creators to build engaged communities where followers interact daily, creating social bonds that drive retention. With 29% of users from the US and global presence, plus expansion beyond gaming into education, business, and creative communities, Discord has successfully diversified revenue streams and reduced market concentration risk.

VALUATION ANALYSIS

Discord's valuation grew 18x from $800 million in 2017 to $14.7 billion in September 2021, raising $500 million in its last round with total capital of $1.1 billion. The Caplight valuation of $6.4 billion and current implied valuation of $5.5 billion (January 31, 2025) based on secondary prices reflect broader private market repricing rather than company concerns.

This discount may represent an attractive entry opportunity given Discord's 150 million monthly users, $445 million revenue run rate, strong $3 ARPU, and demonstrated monetization ability. Notably, Discord rejected a $12 billion Microsoft acquisition offer in April 2021, signaling management confidence in creating significant independent value. Premier investors including Index Ventures, Accel, Benchmark, Tencent, and others provide validation of the platform's strategic positioning.

MANAGEMENT TEAM

Jason Citron, Co-Founder and CEO: Jason founded Discord in 2012, bringing extensive entrepreneurial experience from co-founding OpenFeint, a successful mobile gaming social platform. He has proven expertise in building and scaling consumer technology platforms and has led Discord's evolution into a comprehensive communication platform serving diverse global communities.

Stanislav Vishnevskiy, Co-Founder and CTO: Stanislav co-founded Discord and serves as CTO, designing the platform's core technology architecture. Previously founded Guildwork, a social network service, demonstrating technical expertise in scalable community platforms. His leadership maintains Discord's reputation for reliability and seamless integration capabilities.

SELECT INVESTORS

Discord has backing from premier venture capital firms including Index Ventures, Accel, Benchmark Capital, Coatue Management, Spark Capital, and Tencent. The company's ability to raise $1.1 billion culminating in a $14.7 billion valuation demonstrates sustained institutional support from respected technology investors worldwide, providing capital, expertise, and network effects to continue scaling globally.