Slack, a corporate messaging app, is now a $5 billion company thanks to its investors. The company raised $250 million from Japanese Internet giant Softbank and other investors like Accel Partners, a venture capital firm. Increasing its valuation from $3.8 billion since April 2016, this is a major leap forward for this three-year-old startup.
According to the latest news report, Slack raised about $250 million during this fund raising round, totaling $841 million in funds raised through investors. The company still hasn’t used the $360 million it raised from its last two fund raising rounds.
“It’s a strange world. If it was 10 years ago we’d be public by now,” Slack CEO Stewart Butterfield told the FT. This remark came from Slack’s methods of raising funds without opting for traditional ways of fundraising through initial public offering (IPO).
“We aren’t raising money to spend it,” the company said. “The investments are for operational flexibility and resources to run Slack in the best long-term interests of our customers and employees, without being dependent on outside financing.”
Slack’s Founder and CEO Stuart Butterfield believes the latest funding will help transform the firm’s business model into one that generates cash. “We believe that Slack is the future of work, and this fund reinforces that – providing long-term operational flexibility and resources that prepare us to run Slack as a cash-generating company and move quickly as the market evolves,” said Butterfield on Monday.
Slack predominantly offers chat service for internal employee communication. The features provided by slack are far more sophisticated than most messaging services, with a modern, user-friendly interface that makes it the most popular software of its kind. The company has 8 million weekly active users, and it is used by companies in over 100 countries.
“Slack is the operating system for today’s fast moving businesses, enabling teams to work together effectively at a time when businesses need to be responsive to rapid change and disruption,” said Deep Nishar, senior managing partner at the SoftBank Vision Fund.
Softbank launched its $100 billion vision fund in the month of May, and the company has invested heavily in a number of firms. The list includes the workplace firm WeWork, and the Uber is rumored to be in line for billions of dollars in investments from the fund. The group of investors includes Saudi Arabia’s public investment fund, Apple, and Qualcomm.