It could have been one of the biggest business blunders of the pandemic. In early 2021, Discord spurned a $12 billion acquisition offer from Microsoft, an eye-popping sum for a nine-year-old social communications startup whose app saw a tsunami of new users during the Covid-19 lockdowns. Around that time, Discord held acquisition talks, which didn’t go anywhere, with multiple other firms, including Twitter, according to someone with direct knowledge of the discussions.
But maybe rejecting Microsoft’s offer wasn’t such a boneheaded move on the part of Jason Citron, Discord’s CEO. Sure, the company’s audience—many of them gamers who use it to chat while they’re playing—isn’t growing at the same explosive rate it was when people were hunkering down in their homes. During the first quarter, Discord’s average monthly active users grew 21% to 183 million from 151 million in the same period a year earlier—down from the 68% growth rate in the first quarter of 2021 compared to the year earlier period, according to a current employee with direct knowledge of the figures.
But Discord’s business hasn’t tanked like that of some pandemic darlings. Its revenue during the first quarter was more than $100 million, up 61% from $62 million a year earlier, the current employee said—not too shabby when compared to the anemic 12% revenue growth of Zoom Video Communications during the first quarter. Discord is aiming for full-year revenue of $525 million, which would represent a nearly 70% increase from its $309 million in revenue last year, the employee said.
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