EQUITYZEN USERS COMMUNITY/COMPANIES OVERVIEW
Pre IPO Discord Overview
Discord is a stable business that lacks star potential, the company has no signals of becoming a unicorn. A Market Drop Review by Xenia KS showed that there are two middle peasants with plans to go public by the end of 2022 — Discord and Instacart. I reviewed Instacart recently in another article, check it out!
I’ll move on to the promised full overview of Discord, which will help clarify the reasons for this similarity and more. At the end of this article, we will be able to calculate an overall Discord score thanks to stoplight scoring!
- in this review, I refer to third-party data that I was able to find and access; I always cite primary sources, which you can access by clicking on the hyperlinks
- I am not responsible for the quality of the data presented on third-party resources
- I guarantee the correctness of the information obtained from official sources, while some data in the document is given as is — according to unverified data from an unofficial source — in this case, the value is preceded by “approximately” ~ and the data itself is written in italics
- I deliberately regard data from some sites as insufficiently reliable, but I use them to reflect general dynamics
- the conclusions and estimates set forth herein represent my personal view only, are for informational purposes only, and in no way constitute financial or investment advice
- the information in this document is not a prediction or guarantee of future results, and I am not responsible for any consequences of the use of the data provided
- investing is a high-risk activity, so potential investors should do their own research before entering into any deals and signing contracts
- this review was prepared for the EquityZen Community for informational purposes only
- I use multi-criteria evaluation for the selected companies by several criteria (each in the range from 1 to 3); I also output the final score and mark “red flags” (especially sensitive facts that could potentially affect future investments); the assessments reflect my understanding of the situation, they are not an incentive to action
Executive Summary
- Company: Discord (7 years)
- Founded, Headquarters: 2015, San Francisco, California, USA
- Sector/Market: Social Networking Platforms, Market CAGR of 25.38% (2019–2026)
- Investment history: 16 rounds in total, total investment of $995.4M, valuation on the last round (2021) — $15.2B
- Revenues: estimated annual revenue for Discord is currently $418M
- Probability of exit: high probability of IPO
- Glassdoor rating: 4.1* (121 reviews)
- Client rating: average (GetApp, Google Play, App Store) — 4.6*
Discord Highlights
- Discord operates as a voice, video, and text communication service to talk and hang out with friends and communities. It was originally created for people who loved to play games, but these passionate people realized it could be enjoyed for more purposes. Discord is now used by everyone from local hiking clubs, to art communities, to study groups.
- Mission: “Our mission is to build an easy-to-use communication service that gives people a place to communicate with the people they care about”. ©
- Detailed Discord statistics show that by the end of 2020, Discord had amassed over 150 million active users every month.
- Discord partners with PlayStation.
Origins & Offices
The company was founded in 2015 in the United States.
- San Francisco, California, USA (HQ)
Social media
Discord has many subscribers. The company has average activity in terms of publications.
C-level Executives
- Co-founder and Chief Executive Officer (CEO) (2012-present)
- San Francisco, California, United States of America
- Jason pivoted from game development in 2015 and launched Discord with the goal of bringing players together around the games they love. Before Discord, Jason was the founder and CEO of OpenFeint, the biggest social mobile gaming platform, which was sold to GREE in 2011 for $104 million.
- Chief Legal Officer (CLO) (2020-present)
- Palo Alto, California, United States of America
- Clint Smith is an experienced general counsel and advisor to start-ups who has additional operating experience in HR, Finance, and Corporate Development.
- Before joining Discord, Clint Smith served as general counsel and corporate secretary for MySQL AB and has also headed the legal departments at TrialPay, Inc., Macromedia, Inc., and UUNET.
- Co-founder & Chief Technology Officer (CTO) (July 2015-present)
- San Mateo, California, United States of America
- Vishnevskiy is the CTO of Discord, a popular chat service for gamers with a massive daily active user base. He helped conceive, design, and create the platform with cofounder and CEO Jason Citron. Previously, Vishnevskiy developed tools for MMOs including Final Fantasy XI.
Red flag — a large number of C-level executives firings in 2021–2022
C-level Executives Scoring — 2
Qualified and talented CEO and tops (education and experience are there, but they are not stars in the profile environment);
CEO and tops with medium/low promotional activity or it is obvious that the generator in the company is one person (and if he/she leaves, then the energy of business development will leave).
Market and Competitors
- Communities
- Gaming
- Messaging
- Software
Market in the narrow sense: Social networking platforms (or Voice, Video & Text Chat App)
The market is projected to grow from USD 192.95B to USD 939.68B at a CAGR of 25.38% during the 2019–2026 period
Competitors:
Discord’s competitive advantage: Discord (formerly known as Hammer & Chisel) is a company developing a freeware VoIP application designed for gaming communities.
Discord has a market share of about 0.2%.
Market and Competitors Scoring — 2
Medium/large market with growth prospects;
Relatively equal positions with several competitors (distributed market — oligopoly);
The company has managed to wean itself off competitors or offer a compilation of their technology (or any other competitive advantage).
Stocks and Investments
Total Funding Amount: $995.4M
Number of Funding Rounds: 16
Last Round: Series I (Sep 2021) — Val $15.2B (acc. to ForgeGlobal)
Index Ventures (TOP VC), Spark Capital (TOP VC), Greenoaks Capital, Tencent, and others have also invested in Discord, but in earlier rounds.
Stocks and Investments Scoring — 3
Valuation is growing;
There are no red flags;
Investments are regular (once a year or more), stable (follow-ons are present) — from Pre-IPO investors.
Traction & News
All data on revenue is taken from public sources, the reliability of which I do not guarantee. However, based on the approximate revenue growth/decline dynamics, I can draw conclusions about its trends.
- Discord’s Q2 2021 revenue was $130M
- The estimated annual revenue for Discord is currently $418M per year
- Discord generated $130M in revenue in 2020
- 2022/07/21 — Discord is finally coming to Xbox One and Xbox Series X|S
- 2022/07/20 — Discord’s new Xbox integration will let you send voice chats to your console
- 2021/12/13 — Discord hires former Xbox exec Elizabeth Hamren as COO
- 2021/12/07 — Discord is working on premium memberships, a new monetization option for creators
- 2021/11/12 — Daily Crunch: Discord CEO says company has ‘no current plans’ for crypto integration
- 2019/02/07 — Discord comes under fire for alleged moderator abuse and furry corruption. Update: Discord announced significant changes to its Terms of Service and policy regarding “cub play” imagery after this story broke
- 2022/03/22 — The dark side of Discord for teens. Rich Wistocki teaches social media safety practices and advises parents with kids on Discord to abide by age restrictions and enable parental controls
Traction & News Scoring — 2
Good traction;
Positive in almost all of the above news items;
Revenue is actively growing in the dynamics;
Any problems in the company are counted as minus 1 point of scoring: Discord comes under fire for alleged moderator abuse and furry corruption; The dark side of Discord for teens.
Culture & Team
I take reviews from Glassdoor and Comparably, where current and former employees anonymously leave company reviews. Sometimes there may be conflicting views, indicating a subjective perception of work at a particular company, rather than an error in review analysis.
A comparative table of overall company ratings:
The general trend of team reviews lately:
Positives based on reviews:
- “There are so many great benefits!”
- “Great people”
- “From a technical perspective the team is full of all”
Negatives based on reviews:
- “Lack of management training, unclear career progression”
- “Chaotic and leadership is lacking a lot of core communication skills. There seems to be little strategy and the marketing org is a hot mess”
- “Typical growing pains”
- “The CEO is inexperienced and is not the best leader”
Culture & Team Scoring — 1
Rating = 4–4.5*;
Too few vacancies in the ratio of the number of employees (less than 10%);
Consistently negative feedback.
Client Rating
- Reviews on GetApp: 4.7* (110 reviews)
- Google Play: 4.5* (4.54M reviews), App Store: 4.7* (165.3k reviews)
Client Rating Scoring — 3
Rating = 4.5* and more (high).
Exit
- Discord IPO Could Come in Early 2022: Latest Updates on Discord Stock.
Investors are eagerly waiting for the anticipated Discord IPO. The company is among the most anticipated public offerings of 2022. Moreover, Discord could launch its IPO as soon as early this year. - The date for the Discord IPO has not yet been announced, but it looks likely that a listing on either the NYSE or Nasdaq could happen in H2 2022 or early 2023. The valuation of the company post listing is hard to ascertain, but it could be well north of its most recent $15 billion valuation.
Exit Scoring — 3
There are signals of an upcoming IPO.
Company Scoring
Before you go
Join the discussion of the current situation in the closed Discord group:
