Discord is a social media app and online website that offers abilities such as building custom chatrooms, along with text, video, and audio chat.  The San Francisco based startup was founded in 2015 by Stanislav Vishnevskiy and Jason Citron. Currently Citron serves as CEO and Vishnevskiy serves as CTO. 
Citron has been a gamer ever since he was a child and played World of Warcraft extensively in college. He learned to code so that he could build more games. He built a video game company that eventually folded. He then created a new company , OpenFeint, which Citron describes as being “Xbox life for iPhones”.  He sold the business to Gree  for $104M . He then built another startup, Hammer & Chisel which developed a game entitled Fates Forever. That venture also folded. . This was the last venture Citron was involved in before working on Discord. Vishnevskiy, like Citron was also an avid gamer. As a teen he would get up at 5AM every day so he could play Final Fantasy XI before going to school. .He formed a team of 40 that became the game’s #1 team in the world.  In terms of startups, Vishnevskiy created a startup that attempted to sell many of the tools he built out which eventually folded. . He then joined Hammer & Chisel, which as mentioned above also folded. After this, he pursued developing Discord along with Citron.
As a potential investor, you may be wondering how Discord generates revenue. Indeed, in companies like Discord, which is a social media app, it can be difficult to know at first where the revenue is coming from. After all, Discord’s app is free for the user.  Discord makes revenue through its premium subscription and receives a commission for games sold on its app. . Discord Classic costs $5/month or $50/year, and Discord Nitro costs $10/month or $100/year. Finally, Discord also has a concept known as “server boosts” which can provide added features for a server. 
Discord has virtually unlimited market potential. While built for gamers, the social media app does not have to be used by gamers. Discord is a disruptor in the social media market, disrupting Skype and TeamSpeak. 
In terms of firm growth, the firm has continued to grow fueled by the COVID pandemic increasing interest in social media and online gaming. Revenues are estimated to be $120M a 71% increase from last year.  It should be emphasized that this an only an estimate by Forbes as the company does not release these financials.
One major move that Discord has recently made which could have a negative impact on the retention and acquisition of future customers. In light of the Capitol riots, Discord banned a pro Trump server ‘The Donald’ citing that it has ‘zero tolerance against hate and violence.’  However, the move is controversial for several reasons. The first is that Discord stated that it is banning the server despite having no evidence that the server was used to organize the riots.  Furthermore, it raises a broader question about free speech. Currently Social media is protected by a clause known as “Section 230” which gives social media firms immunity from challenges with regards to blocking and deleting ‘offensive content’ . However, in recent years there has been a push to remove Section 230 immunity from social media firms such as Facebook, Twitter, Instagram, Snapchat, Reddit, Discord, etc.
Potential Impact on Financials
The above situation could affect Discord’s financials if Trump supporters as well as those who think Discord has gone too far decide to leave Discord and potentially build an alternative social media app. Parler is an example of an alternative social media company whose user base is mainly conservatives who believed the social media firms censor specifically conservative points and conservative leaders  known as “Big Tech.”. Additionally, if Section 230 is removed in the coming years, social media firms, including Discord will be open to more lawsuits which could potentially lead to an increase in settlement claims paid out.
In its latest funding round in December 2020, Discord raised $100M. Investment firm Greenoaks Capital an venture capital firm Index Ventures participated.  Discord is currently valued at $7B. . To date, Discord has raised a total of $479.3M .
Discord is a disruptor in a social media market that is rapidly growing, but also has experienced recent controversy in the past few weeks. As such the market is volatile, making Discord an interesting company to watch should it pursue an IPO.
Articles for Further Reading (and in part used to create this post)