So Just How Wealthy is Discord? The Inside Scoop on the Company‘s Finances
In just 7 short years, Discord has rocketed from a plucky startup to a $15 billion tech titan. Its founders, Jason Citron and Stanislav Vishnevskiy, are now worth billions. Let‘s dig into the incredible growth and wealth behind Discord, one of the hottest private companies in tech.
Discord by the Numbers
Before we get into the details, here are some key stats on where Discord stands today:
- Valuation: $15 billion
- Total Funding: $983 million
- Annual Revenue: ~$300 million (estimated)
- Founder Net Worths: Citron $2.1 billion, Vishnevskiy ~$500 million
For a company that launched only in 2015, these numbers show the tremendous scale and success Discord has achieved. Now let‘s look at how Discord reached these heights and made its founders and investors seriously wealthy in the process.
Discord‘s Funding Journey: From Scrappy Startup to $15 Billion Company
Discord was started in 2015 as a scrappy bootstrapped startup by two gaming industry veterans – Jason Citron and Stanislav Vishnevskiy.
Citron had previously founded OpenFeint, a social gaming platform he sold for $100 million in 2011. Discord was initially focused on providing chat and communication tools for gamers.
In 2016, Discord raised its Series A round of $20 million to expand the platform beyond gaming. This included an investment from major media company WarnerMedia.
But it was Discord‘s later funding rounds that really took things to the next level:
- Series D (2019) – $150 million led by Greenoaks Capital
- Series E (2020) – $100 million led by Index Ventures
- Series F (2020) – $100 million led by Tencent
- Series G (2021) – $100 million led by Institutional Venture Partners
- Series H (2021) – $500 million led by Coatue
| Funding Round | Year | Amount |
|---|---|---|
| Seed | 2015 | $850,000 |
| Series A | 2016 | $20 million |
| Series B | 2017 | $50 million |
| Series C | 2018 | $50 million |
| Series D | 2019 | $150 million |
| Series E | 2020 | $100 million |
| Series F | 2020 | $100 million |
| Series G | 2021 | $100 million |
| Series H | 2021 | $500 million |
| Total | $983 million |
This massive $500 million Series H in 2021 propelled Discord to a $15 billion valuation – more than double its $7 billion valuation just months prior.
Thanks to this prolific funding, Discord now sits among the highest-valued private tech companies globally. The company has raised nearly $1 billion in total to date from top-tier VC firms who see big potential still to come.
Not bad for a startup that was bootstrapping with the founders‘ own savings just 6 years ago!
Discord‘s Revenue Streams – Turning Free Users into Profits
Discord started off offering its service entirely for free. Even today, the vast majority of Discord users don‘t pay anything to use the platform.
So how does Discord make money from all those free users? The company has introduced several creative monetization streams:
Nitro Subscriptions
Discord Nitro offers premium subscriptions with perks like custom emoji, larger file uploads, and a unique profile badge.
There are two Nitro tiers – Nitro Classic ($4.99/month) and Nitro ($9.99/month).
Nitro is Discord‘s primary revenue source. The company reported over 1 million paid Nitro subscribers in 2020, generating an estimated $120 million annually.
With continued growth, Nitro could produce $300-400 million in recurring revenue at current prices.
Server Monetization
In early 2021, Discord introduced new ways for server owners to monetize their communities through "Server Subscriptions".
Fans can subscribe to servers monthly for access to special roles, channels, and perks. Server owners get to keep 90% of the subscription revenue.
This provides Discord a 10% cut of server subscription income while incentivizing creators to build the platform.
App Store Revenue Share
On iOS devices, Discord earns a 30% commission on any in-app purchases made through the App Store system. This includes Nitro subscriptions purchased on iOS.
With Discord ranking consistently high on the app store charts, revenue from iOS could contribute significantly to the bottom line.
| Revenue Source | Estimated Annual Revenue |
|---|---|
| Nitro Subscriptions | $120+ million |
| Server Subscriptions | $25+ million |
| iOS Revenue Share | $30+ million |
| Total | $175+ million |
These revenue streams have likely already pushed Discord‘s annual sales past $200 million based on public growth figures. With over 150 million users, there‘s still plenty of room to expand monetization further.
Just How Profitable is Discord?
For all its impressive revenue growth, Discord is likely still not very profitable on a net income basis.
The company has prioritized expanding the platform over maximizing profits. Discord invests heavily in infrastructure, new features, marketing, and its workforce which pushes down profit margins.
As a private company, Discord‘s financials are not public record. But its CEO Jason Citron has openly stated profitability has not been the focus so far.
However, Discord does produce positive gross margins. The company noted its gross margin exceeded 50% as of 2021, meaning it keeps over $0.50 for every dollar of revenue.
With scale, Discord will focus more on profit optimization. But for now, it‘s growth over profits.
Discord‘s Founders Are Worth Billions
As two of Discord‘s largest shareholders, founders Jason Citron and Stanislav Vishnevskiy are now worth billions based on their ownership stakes.
Jason Citron – Citron owns over 10% of Discord based on his co-founder equity grants. At the company‘s $15 billion valuation, Forbes estimates his net worth around $2.1 billion.
Stanislav Vishnevskiy – As co-founder, Vishnevskiy likely owns a 5-10% stake in Discord. While his exact worth is unknown, reasonable estimates put his net worth between $500 million and $1 billion.
The founders‘ wealth will continue to grow as Discord‘s valuation and revenue numbers keep rising. If the company ever goes public, their net worths would likely soar even higher.
This just shows the immense value creation and wealth generation that‘s possible in tech when you build a product people love. Discord hit a market need and executed superbly. Now its founders are reaping the benefits.
Who Else is Making Money from Discord?
Discord has made its founders billionaires. But plenty of other investors and employees have also earned small fortunes thanks to the company‘s success.
Early Investors
Firms like Index Ventures and Greenoaks Capital that got in early at lower valuations now own sizable stakes worth hundreds of millions.
Index Ventures led Discord‘s Series A and owns a substantial portion today. Greenoaks led the Series D round and owns around a 5% stake.
These early backers will make tremendous returns on investment if Discord continues to grow.
Tencent and Sony
Major media companies Tencent (Chinese tech giant) and Sony have also invested in Discord.
Tencent participated in the Series B round in 2017. Sony invested $150 million in 2020. Both likely own 3-5% ownership stakes.
While smaller than the early VC funds, these are still valuable positions in a high-growth company.
Employees
Discord has given significant equity to its employees. Engineers who joined in the early years now hold shares worth hundreds of thousands or even millions.
While exact numbers are unknown, Discord has likely produced over 100 employee-millionaires already from those holding equity.
Employees will continue reaping gains as Discord‘s value appreciates – even more so if it ends up going public.
What Does the Future Hold for Discord‘s Wealth?
It‘s an incredible rise to prominence and profitability for Discord in just a few short years. And the company still likely has room left to run.
International expansion offers a massive growth opportunity to keep increasing revenue. Converting more of Discord‘s 150 million free users into paying customers will also boost sales.
An IPO seems likely in Discord‘s future. Going public would allow employees and investors to cash out substantial wealth. It would also generate huge windfalls for the founders through public stock sales.
If Discord maintains this trajectory, it has the makings of a 100 million+ user platform on its way to $1 billion in annual revenue in the next 3-5 years.
That likely points to a $30-$40 billion IPO valuation someday – and billions more in wealth creation to come.
So in summary, Discord is already a massive business making founders, employees, and investors seriously wealthy. But if the company stays on course, its financial success may still just be getting started.