250M users, $3.52 per head: Discord goes public

On January 6, 2026, Discord filed its confidential S-1 with the SEC to go public. After rejecting $12 billion from Microsoft in 2021, the gaming and community platform is finally making its move toward public markets.

My verdict is clear: this is the most important tech IPO of Q1 2026. Not just because of the numbers, but because of what it signals for the entire startup ecosystem that's been waiting for the right moment to go public.

After analyzing the available documents, company statements, and investment bank moves, here's everything you need to know before Discord rings the bell.

The Hard Numbers

Let's start with what we know for certain:

The confidential filing allows Discord to gauge institutional investor appetite before making its financials public. If you ask me directly, it's a smart play: they can adjust expectations without public scrutiny.

Why Now and Not Before

Discord has been flirting with going public for years. In 2021, when Microsoft offered between $10 billion and $12 billion, Jason Citron (founder and then-CEO) said no.

The obvious question: why now?

1. The IPO Market Recovered

Tech IPOs in the U.S. raised $15.6 billion in 2025, more than double 2024. The window is open.

2. New CEO with IPO Experience

In April 2025, Discord appointed Humam Sakhnini as CEO. Sakhnini comes from Activision Blizzard, where as president of King (Candy Crush) he grew operating income from $600 million to $1.3 billion.

I won't sugarcoat it: they hired Sakhnini specifically for this moment.

3. The Company Is Approaching Profitability

After laying off 17% of staff in January 2024, Discord aggressively optimized costs. Citron's stated goal was to reach profitability in 2024.

The Metrics That Matter

The number that concerns me is the $3.52 ARPU. For context:

• Twitter/X: ~$35 per user
• Reddit (post-IPO): ~$6 per user
• Discord: $3.52 per user

That means Discord monetizes 2x to 10x worse than comparable platforms. It's the elephant in the room that investors will question.

Where Discord's Money Comes From

Discord's business model is unusual for a platform of its size:

1. Discord Nitro (54% of revenue)

Premium subscriptions cost:

• Nitro Basic: $2.99/month
• Nitro: $9.99/month

They offer custom emojis, better video quality, larger file uploads, and other cosmetic features. It works, but the ceiling is limited.

2. Server Boosts

$4.99/month per boost. Users "boost" servers to unlock additional features for the entire community.

3. Quests (Non-Intrusive Advertising)

Launched in 2024, Quests offer in-game rewards in exchange for watching streams of specific games. It's advertising, but it doesn't feel like it.

4. Server Subscriptions

Discord takes only 10% commission when creators sell premium access to their servers. Compared to Steam's 30% or Twitch's 50%, it's aggressively competitive.

My verdict: the model is sustainable, but it needs to scale. ARPU has to go up or the valuation won't hold.

The Valuation Range: From $5B to $25B

Here's where things get interesting. Depending on who you ask, Discord is worth:

For context, Reddit went public in March 2024 at $6.1 billion with a business model much more dependent on advertising (94%). Discord, with its subscription model, should trade at a premium.

But the uncertainty is real. Secondary markets in 2024-2025 valued Discord at $6.8 billion, well below the $15 billion from 2021.

The Investors Already Inside

Discord has raised approximately $978 million in funding from:

The presence of Tencent and Sony as strategic investors is significant. Both have an interest in Discord thriving as a gaming communities platform.

The Risks Nobody Wants to Mention

After months of following this story, these are the risks I see:

1. Content Moderation

Discord has been criticized for child safety issues. Several U.S. states are questioning its protection measures. A moderation scandal pre or post-IPO would be devastating.

According to Seeking Alpha, approximately 15% of the workforce is dedicated to safety. It's a lot, but is it enough?

2. Weak Monetization

I already mentioned it, but it bears repeating: $3.52 ARPU is very low. If Discord doesn't demonstrate a clear path to better monetization, investors will punish the price.

3. Unproven Profitability

Although Discord said it was targeting profitability in 2024, there's no public confirmation it achieved it. The S-1 financials will reveal the truth.

4. Gaming Dependency

Although Discord has expanded into programmer communities, education, and crypto, the core remains gaming. If the gaming market contracts, Discord suffers.

The Opportunities That Excite Me

It's not all risks. Discord has interesting cards to play:

1. Asia-Pacific Expansion

34% of users already come from APAC. The projection is to reach 300 million MAU by Q4 2026, with much of that growth coming from Asia.

2. Quests and Non-Intrusive Advertising

The Quests model is genuinely innovative. If it scales well, it can solve the ARPU problem without alienating the user base that hates traditional advertising.

3. Creator Economy

The 10% commission (vs 30-50% from competitors) can attract creators looking for alternatives to Patreon, Twitch, or YouTube. It's a multi-billion dollar market.

4. AI and Automation

Discord already has AI-powered AutoMod for moderation. There's potential for AI features that improve the experience without being invasive.

Comparison with Reddit's IPO

Reddit is the most direct comparable:

Reddit is up 26% since its IPO. If Discord replicates that success, investors who get in at the IPO could see similar returns.

My Verdict: Invest or Not?

If you ask me directly:

For aggressive investors: Discord's IPO is interesting if you believe in the long-term monetization potential. With 250 million users and a subscription model, it has the ingredients to be a compounder.

For conservative investors: Wait for the first post-IPO earnings. Initial volatility will be high and the financials will reveal whether profitability is real or just a promise.

My position: If the valuation is in the low range ($10B-$12B), it's attractive. If they're asking $20B+, the risk-reward doesn't work with a $3.52 ARPU.

Timeline: What to Expect in Coming Months

What This IPO Means for the Tech Ecosystem

Discord's IPO is a test for the entire startup market.

If it succeeds (valuation >$10B, rises post-debut), it signals that public markets are ready for growth platforms. Unicorns like Notion, Figma, Canva, and others are watching.

If it fails (valuation <$8B, falls post-listing), the IPO freeze continues and startups will keep depending on private markets.

After years of drought, the tech ecosystem needs a win. Discord has the opportunity to deliver it.

Frequently Asked Questions

When exactly is Discord going public?

The debut is scheduled for March 2026, although the exact date depends on market conditions. The confidential filing was submitted on January 6-7, 2026.

How much is Discord worth before the IPO?

The last private valuation was $15 billion in September 2021. Secondary markets in 2024-2025 valued it between $6.8B and $10B. The expected IPO range is $10B-$15B.

Who is advising Discord on the IPO?

Goldman Sachs and JPMorgan Chase are the lead underwriters. Both are top-tier banks with experience in tech IPOs.

Why did Discord reject Microsoft in 2021?

Jason Citron, founder and then-CEO, wanted to maintain the company's independence and believed Discord could be worth more in the long run. Microsoft's offer was $10B-$12B.

Is Discord profitable?

There's no public confirmation. The stated goal was to reach profitability in 2024 after laying off 17% of staff. The S-1 financials will reveal the actual situation.

Conclusion: The IPO Everyone Was Waiting For

I won't sugarcoat it: Discord is entering public markets at a moment of uncertainty.

On one hand, it has 250 million users, a brand beloved by the gaming community, and a subscription model that avoids advertising dependency.

On the other hand, its ARPU is low, profitability isn't confirmed, and content moderation is a latent risk.

My verdict is clear: watch the exit price. If Goldman Sachs and JPMorgan price it conservatively ($10B-$12B), there's potential. If they swing for the fences ($20B+), the market will correct them.

What's clear is that March 2026 will be a defining month for whether the tech IPO market is truly back. Discord has the pressure to prove that high-growth startups can still succeed in public markets.

And if there's one company that can do it, it's the platform where 250 million people gather every month to talk, play, and build community.

Are you going to invest in Discord when it goes public? Do you think the valuation is justified? Let us know in the comments.