Discord, a social media company that is popular among gamers, has recently held talks with the tech giant, Microsoft. They have been in talks for a transaction that could top $10 billion, according to people involved in the situation.
One of the people confidential discussed that the talks were preliminary and no deal is imminent. During the pandemic, the talks started as the video game industry boomed and Microsoft bolstered its gaming business with deal-making.
In recent years, Microsoft’s acquisitions have focused more on online communities, such as LinkedIn, GitHub, and Minecraft.
Last summer, Microsoft was also in talks to buy TikTok, the popular video-making app among teenagers, but the deal fell apart. In September, Microsoft bought ZeniMax Media for $7.5 billion which is the parent of several large gaming studios.
Reportedly, Microsoft is in talk with Discord for an acquisition. The company counts monthly active users based if more than 100 million and has been highly popular during the pandemic.
Since 2014, the San Francisco-based company has raised approximately $600 million in funding with various suitors over the years.
In December, the privately held company was valued at $7 billion and is also a candidate to go public. The company has hired its first chief financial officer this month which is also a clear sign that it may be preparing for an initial public offering.
Spokespeople for Microsoft and Discord declined to comment. Bloomberg has reported Microsoft’s involvement while VentureBeat said that Discord was holding deal discussions.
Previously, Microsoft said that it wanted to make it easier for people to play games on its Xbox consoles. In the last three months of 2020, Microsoft’s gaming businesses generated an estimated $5 billion in revenue, following the release of new Xbox consoles.
Last year, Discord announced its plans to expand beyond gaming. The platform has been used for multiple activities such as college classes and organizing events.
Last year, the company even crossed $100 million in revenue by selling subscriptions to a premium version of the service.