I share your distrust, which is one of the reasons I'm not a big fan of Discord. I don't know where Riot's revenue will come from, but Matrix [1] (and Riot by extension [2]) support end-to-end encryption. As others have said you can also set up your own server.
I absolutely wish Matrix could crush Discord. An entire generation of users came out burned by programs like Skype, Hangouts, MSM, Facebook Messenger, etc and then threw themselves eagerly into another closed ecosystem messenger just because it was one of the first to manage a really performant web client.
We are not going to sell your data, nor can we (especially if it’s end-to-encrypted or sitting on someone else’s server)! The plan for making $ at New Vector is to provide paid hosted services of various kinds instead. (I work on Matrix).
The original plan was to sell related software and services to telecoms companies. The parent company that funded development of Matrix already has similar business relationships with them. Think e.g. a Brazilian phone company.
I think the idea is that those phone companies are scared of WhatsApp and Messenger. It's to their advantage to fund an open, federated messenger bus, so their attempts to compete with them work well globally.
This B2B market has the virtue that it allows improvement and maintenance of an open, consumer application, without contradicting revenue from business uses.
I'm not sure if this is still the ultimate revenue plan, would love to know!
But I'm also not sure they need to have any of your data.
The riot.im client lets you connect to your own Matrix server rather than an "official" one, so they're not really able to monitor your usage or know who you are unless the app is phoning home.
Maybe it's collecting analytics data? Would love to know. I only use the Riot.im app on mobile and use other clients for desktop usage.
I distrust for-profit messenger apps, no matter how good their intentions are. Sooner or later, they'll sell my data :(