CNBC Disruptor 50

3. Discord

Founders: Jason Citron (CEO), Stanislav Vishnevskiy
Launched: 2015
Headquarters: San Francisco
Funding:
$479.3 million
Valuation: $7 billion
Industry:
Media
Previous appearances on Disruptor 50 List: 0

Persephone Kavallines

Last month, after talks that included a reported $10 billion bid from Microsoft fell apart, Discord once again became a highly valued free agent. The company allows public and private groups to gather and chat by text, audio and video via their social platform.

The San Francisco-based company claims about 150 million active users per month. That's approaching the size of Twitter's 199 million daily active users. Discord makes money by selling subscriptions to a premium service that lets you customize your profile and upload high-resolution images and videos for $9.99 per month or $99.99 per year.

Its business model stands out in the social network space where so many technology companies, such as Facebook and Twitter, rely on advertising for the bulk of the revenue. The company says it's pushing the industry to think more creatively about monetization and won't be dinged by the criticism of other social media giants: "If you don't pay for the product, you are the product."

Live voice chats are the hottest trend in social media right now, thanks to apps like Clubhouse, ranked No. 33 on this year's CNBC Disruptor 50 list, and Twitter's new feature called Spaces. Facebook also is readying its live audio product. Discord was early to the trend, and its live audio chat feature is popular for video gamers who want to talk about what they're playing in real-time. That's because prior to Discord, gamers used tools like Skype to communicate — but largely out of necessity, not desire. So it's no wonder that Microsoft, which acquired Skype for $8.5 billion in 2011, was reportedly willing to pay a pretty penny for the company earlier this year.

Co-founder and CEO Jason Citron is a lifelong gamer, who sold his first company OpenFeint, a mobile platform for social gaming, to Japanese internet technology company GREE for $104 million the same year Microsoft bought Skype. His second company, Hammer & Chisel, was a gaming company that integrated voice and text chat — a value proposition that inspired Citron's pivot to what's now known as Discord. And much in the same way that Uber, Slack and Venmo have become verbs among their respective user loyalists, Discord has become a noun among gamers, used as their identifier on the platform.

VIDEO4:5004:50
Discord CEO Jason Citron on where he thinks social audio is headed

While it's widely popular among video gamers, Discord's user base has expanded in recent months, now also popular among sports fans, music groups and investors (including the cryptocurrency crowd and the Wall Street Bets Reddit community, which turned to Discord during the GameStop craze earlier this year).

Like many other social networks, the company has had problems with abuse and problematic users. The app became a favorite destination for far-right followers a few years ago, but eventually banned those groups. Additionally, Discord became a founding member of The Digital Trust & Safety Partnership, a coalition among tech companies to develop a framework for handling harmful content and behavior online. Last year, the company also joined the Internet Association and the Family Online Safety Institute.

In December, Discord raised $100 million in a private funding round that valued the company at $7 billion. Their latest financing was led by Bessemer Venture Partners and Greenoaks Capital. Additional investors include Index Ventures, Greylock Partners, Accel Partners and Tencent Holdings.

Contributed by Riley de León

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