How to Invest in Discord Stock in 2024
Discord was initially launched as a communication platform for gamers.
However, during the pandemic, Discord transformed itself from being a place for gamers to a platform where communities and friends could stay in touch.
The move paid off.
Today, more than 963 million messages are sent every day on Discord. It also boasts more than 196 million monthly active users, an increase of 16% since 2022.
In addition to messaging capabilities, the platform also offers communication through voice and video calls as well as media and file sharing. Users can also talk privately or join chat rooms.
In Q1 of 2023, Discord reported $54.9 million in revenue, which put it on pace to generate more than $200 million in revenue for the year. This number is up 40x since 2016.
As of now, Discord is a private company. But that doesn't mean it's impossible to invest in it.
Can you buy Discord stock?
Discord is a private company, which means you can't buy its stock in your regular brokerage account.
There is no Discord stock symbol and it doesn't have a stock price chart.
While some rumors have circulated about an IPO, the company has not yet announced plans to go public. That said, it turned down a $12 billion bid from Microsoft in 2021.
After turning down an offer like this, I'm speculating that the founders believe they can get a higher valuation at a later date, most likely from the public market.
While it waits to IPO until it can receive an even higher valuation, you may think you're locked out from investing in it.
However, depending on your annual income or net worth, that might not be the case.
How to invest in Discord
Are you an accredited or retail investor?
You qualify as an accredited investor if you meet one of the following criteria:
- You have an annual income of $200,000 individually or $300,000 jointly
- Your net worth exceeds $1,000,000 (excluding your primary residence)
- You are a qualifying financial professional
If you're an accredited investor, the next section is for you. If not, there are still a few ways you can invest in Discord, albeit less directly. Skip ahead to the second section below.
How to buy Discord stock as an accredited investor
If you're an accredited investor, you can invest directly in Discord via Hiive.
Hiive is a marketplace that gives accredited investors access to high-growth, VC-backed startups and private companies like Discord:
Discord is one of the most actively-traded companies on Hiive and, as of the time of this writing, currently has 18 available listings. Each of these listings has a unique asking price and number of shares.
On Hiive, buyers can either accept the listing price and volume offered or place bids and negotiate directly with the sellers. (Sellers may be employees, venture capitalists, or angel investors.)
Additionally, there are no buyer fees.
Click the button below to view current offerings on Discord:
How to invest in Discord as a retail investor
Unfortunately, there is no way for retail investors to invest directly in Discord.
However, there are a few roundabout ways to gain exposure to the company, though they're very indirect.
Invest in funds with exposure to Discord
The Private Shares Fund (PRIVX) invests in a number of venture-backed private companies. As of the time of this writing, Discord is its 4th largest holding (2.25% of the fund).
Until Discord's IPO, this may be the closest thing to a direct investment you'll find, though you'll want to make sure you're comfortable owning the rest of the private companies in the fund, too.
Two other funds to keep your eye on are the Ark Innovation ETF (ARKK) and the Fundrise Innovation Fund, which makes venture capital investing available for retail investors.
Invest in Discord's investors
To date, Discord has raised $995.41 million from outside investors.
While the majority of Discord's investors are private equity firms that retail investors don't have access to, two public companies have invested in it.
1. Sony Interactive (SONY)
Sony took part in the Series H funding round, which raised $100 million at a valuation of $14.5 billion in September 2021.
While the exact size of its stake is undisclosed, Sony was one of several investors who participated in the round, so we can estimate it invested ~$20 million.
A $20 million stake in Discord represents just 0.017% of Sony's $112.4 billion market capitalization, so buying shares of Sony to invest in Discord is a very indirect way of gaining exposure.
The partnership could deepen over time if there is potential for further integration between Discord's product and Sony's PlayStation consoles.
2. Tencent Holdings (TCEHY)
Tencent Holdings is an investment holding company that invests in social media, messaging, payments, online advertising, and business services in China and internationally.
Tencent participated in Discord's Series C round, which raised $20 million at a valuation of less than $1 billion. If it invested $5 million, that stake is worth around $80 million at a valuation of $15 billion.
That $80 million investment is just 0.022% of its market value. Again, while it would give you exposure to the company, buying Tencent is an extremely diluted way to own a piece of Discord.
Invest in Discord's competitors
If you're bullish on voice-over-internet-protocol (VoIP) companies and instant messaging applications, you may be interested in investing in Discord's competitors, especially those available on the public market.
- Slack: Slack is a popular communication tool for businesses. It was acquired by Salesforce (CRM) in 2021 for $27.7 billion.
- Teams: Microsoft Teams is Slack's primary competitor, which also serves enterprise customers. It's one of Microsoft's (MSFT) most popular Office applications.
- Skype: While Slack is largely text-based, Skype focuses on voice and video calls. It was acquired by Microsoft for $8.5 billion in 2011.
Alphabet (GOOG, GOOGL) and Meta Platforms (META) also offer competing products: Google Meet and Meta's WhatsApp.
Who owns Discord?
I would estimate that co-founders Jason Citron and Stanislav Vishnevskiy still have majority ownership of Discord.
As mentioned above, Discord has raised just under $1 billion from a number of outside investors including Sony, Tencent, Dragoneer Investment Group, Fidelity Investments, Accel, Franklin Templeton, Spark Capital, Greylock Partners, and others.
In addition to outside investors, employees also own some percentage of the company, though there is no information on how much. Many employees are likely receiving additional stock options as part of their compensation.
How to buy the Discord IPO
Rumors of a Discord IPO began circling in 2021 after the company turned down sizable bids from Microsoft, Amazon, and Twitter.
Since then, the rumors have quieted down as Discord still hasn't made any indication of its initial public offering. That said, given its size and the history of its founders, I expect the company has plans to list in the next few years.
With plenty of interest from private equity groups and over $200 million in annual revenue, it's unlikely Discord will go public before the IPO market warms up again.
If Discord does go public, you'll be able to look up its stock symbol and buy it in your brokerage account. If you don't have a brokerage account, we recommend Public.
On Public, you can Invest in stocks, ETFs, Treasuries, and cryptocurrencies, all on one of the most well-designed investing platforms.
Discord valuation chart
Here's a look at how Discord's valuation has increased over time:
Source: PitchBook Data
Discord's most recent funding round in September 2021 valued the company at $14.7 billion.
