The COVID-19 pandemic has tilted the tables toward the social network.
Messaging platform Discord has ended deal talks with Microsoft and plans to focus on expanding the business as a standalone company. This is according to a Reuters report based on sources familiar with the matter.
Reuters had reported in March that Microsoft was in talks to buy Discord for more than $10 billion. But the social platform seems to have demurred from joining the Microsoft pantheon of acquisitions. They will instead focus on building the chat platform and making money from its user base that has grown quickly during the pandemic. Reuters sources said that the company is also contemplating an IPO, but not in the immediate future.
Microsoft and Discord did not immediately respond to requests for comment, said Reuters.
Pandemic has caused a boom in social media platforms
Social networking has grown during the COVID-19 pandemic as people increasingly go online for activities from gaming to investment. Discord, which allows public and private groups to gather and chat by text, audio and video, has expanded from a gamers club to all types of communities, including sports fans, music groups and cryptocurrency investors.
The San Francisco-based company’s revenue grew to $130 million last year through its Nitro premium subscriptions, at $9.99 monthly or $99.99 annually, for features such as special emojis and enhanced video resolution. This subscription-based business model is uncommon in the social network space. Most social media platforms, such as Facebook and Twitter, rely on advertising for the bulk of the revenue.
And with over 140 million users, Those subscription revenues start to add up.
In December, Discord raised $100 million in a private funding round that valued it at $7 billion, counting Greenoaks Capital and Index Ventures as investors.