It’s been a rocky road to glory for Discord, a startup whose iPad battle arena game, “Fates Forever,” earned it a top spot at our 2013 TechCrunch Disrupt show, but wound up flopping with users.
What a difference a few years makes. After pivoting to a voice and text chat tool for video game teams and trash talkers in 2015, Discord’s current trajectory makes it one of few consumer-facing companies that’s now reaching “escape velocity,” as one of its early investors gushes.
In fact, San Francisco-based Discord has 45 million registered users on its platform, quadrupling from a year ago, with 9 million daily actives. Now Discord is aiming to become the communication layer for gaming, as it recently closed a competitive financing round.
Index Ventures is said to have led the roughly $50 million funding round, which quietly took place in January at a pre-money valuation of $725 million, according to our sources. Institutional Venture Partners also chipped in a significant amount. And earlier backers — including Greylock Partners and Benchmark — participated.
When pressed for comment TechCrunch’s report, Discord confirmed to us that it had raised a funding round earlier this year, and provided this statement from CEO Jason Citron:
“We are extremely proud of the impact Discord is making and the progress of our mission to connect people around their love of gaming. This has resonated with our community and also the investment community who see the value in what we are creating. Any investment we earn is poured directly into making Discord better and supporting the massive growth we’ve seen over the past year.”
A source close to the company says Discord will likely raise more money soon, too, given outside interest. (There “isn’t much else going on in consumer land right now,” observes this person.)
Interestingly, some of that new capital went toward cashing out employees, a move that has seemingly created mixed feelings among earlier investors. One source says “quite a bit” of the new round was used to acquire the secondary shares of Discord staffers, with this person expressing concern that liquidity has come too soon for those employees, considering that Discord was founded in 2012.
Another source notes that Discord enabled its early employees to sell their shares to ensure that everyone’s interests are aligned. Given that Discord pivoted from its early mission and that it today requires different skill sets than at the outset, not every employee who began with the company remains well-suited…