Start Chat Discord Inc. stopped talks to sell to potential suitors, including Microsoft Body.
MSFT -0.49%
, according to people familiar with the matter, as it resumes interest in a potential initial public offering.
Microsoft has been in advanced talks to acquire Discord for at least $ 10 billion, The Wall Street Journal reported last month. Those talks ended without an agreement, although it is possible that they could be rekindled in the future, some people said.
Microsoft, whose market value rose nearly $ 2 trillion on Tuesday, was looking for acquisitions that would help it reach more consumers. Last summer, it explored a tender to buy parts of the TikTok video sharing app amid a geopolitical confrontation demanded by the Trump administration.
Some of the people said that the discord supported the interest of at least three companies in a business. They said that Discord is behaving well and prefers to remain independent at this time.
San Francisco-based Discord operates a free online text, audio and video chat platform. Especially loved by gamers, its popularity has grown since the pandemic spread, while people have turned to it as a safe way to connect with friends and family.
Launched in 2015, Discord doubled its valuation to $ 7 billion in a December round of funding. Overall, the company raised about $ 480 million, according to Crunchbase. Investors include Greenoaks Capital, Greylock Partners and Index Ventures.
In a move that could facilitate an IPO, Discord hired its first chief financial officer, Tomasz Marcinkowski, a former Pinterest Inc.
executive. While Discord is not a video game company, many of its users rely on it to communicate with each other while playing games, and several companies with links to the video game industry have gone public in the last year, including Roblox Corp. developers and Playtika Holding Body.
, manufacturer of hardware games Corsair Gaming Inc.
and the provider of Unity Software game creation tools Inc.
Roblox made a direct list last month, revealing original plans to go the traditional IPO route, after the video game company decided it was too difficult to set the right price for its shares.
An agreement for Discord would have helped Microsoft expand its social media presence beyond LinkedIn Corp. and what he developed through his Xbox video game business. Discord users say the platform offers more attractive features, such as high-quality sound, than competing chat services, including even Xbox and Skype, which are also owned by Microsoft.
In addition to last year’s unsuccessful discussions about TikTok, Microsoft dropped Mixer, its live streaming video game service, which struggled to compete with Amazon.com. Inc.
Twitch, Alphabet Inc.
YouTube and Facebook games.
Technology giant has made several acquisitions in recent years, most recently its proposed agreement for Nuance Communications Inc.
It spent $ 7.5 billion earlier this year to acquire video game company ZeniMax Media Inc., $ 7.5 billion on software development platform GitHub Inc. in 2018 and $ 26.6 billion on LinkedIn in 2016.
Write to Sarah E. Needleman at [email protected] and Cara Lombardo at [email protected]
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