Slack Technologies

Slack is a corporate messenger created by Stewart Butterfield and launched in February 2014. The name Slack comes from the phrase "Searchable Log of All Conversation and Knowledge," that is, "Journal of conversations and data with the search function." Slack allows team members to communicate in channels, private groups and directly with each other, as well as search the contents of conversations. Slack can integrate with services such as Google Drive, Trello, Dropbox, Box, Heroku, IBM Bluemix, Crashlytics, GitHub, Runscope and Zendesk.

Performance indicators

2019: Revenue - $400.6 million, losses - $138.9 million

According to the results of the financial year closed on January 31, 2019, Slack received revenue of $400.6 million, which is almost twice the figure of a year ago ($220.5 million). Net losses compared to these periods decreased slightly - from $140.1 million to $138.9 million.

Audience

2019

The number of subscribers using paid Slack features by the end of April 2019 year amounted to 95 thousand users. The number of customers using paid service functions and spending on them more than 100 thousand dollars a year increased by 84% over the year and amounted to 645.

2015-2017

As of February 2015, Slack had 500 thousand users. By September 2017, the audience of the service had grown to more than 9 million people who enter the messenger at least once a week, with 6 million subscribers using it every day. About 2 million users, that is, about 50 thousand teams, pay Slack for services, which allows the company to receive subscription revenue in the amount of $200 million.

History

2022: Disconnection of messenger clients in Russia amid crisis in Ukraine

In March 2022, the company confirmed the disconnection of customers of the Slack corporate messenger from Russia in connection with international sanctions and the policy of the parent company Salesforce against the backdrop of Russia's special operation in Ukraine.

"Slack should take measures to comply with the sanctions norms of the United States and other countries where we work," the statement said. In some cases, the company will suspend accounts without notice.

Restrictions on the work of Slack apply mainly to organizations that have fallen under direct sanctions.

2021: Launch Organization to Create Open Source Mobile Software Development Tools

In early March 2021, the Linux Foundation launched the Mobile Native Foundation organization, designed to encourage the creation of open source tools for the development of mobile applications. More details here.

2020

Salesforce bought Slack for $27.7 billion

In early December 2020, Salesforce announced the largest acquisition in its history. For $27.7 billion, the company buys the developer of the corporate messenger Slack.

Under the terms of the transaction, Slack shareholders will receive $26.79 and 0.0776 of Salesforce shares for each company's securities owned by them. Thus, the value of one Slack share in the transaction is estimated at $45.52, which is more than 54% higher than their value at the time of the closing of the stock market on November 24, 2020 - the day before the first rumors about the merger of Salesforce and Slack appeared in the media.

This is a marriage made in heaven, "says Salesforce CEO Mark Benioff, commenting on the deal. - Together, Salesforce and Slack create the future of the enterprise software market and change the way all employees work in a completely digital world where you can work from anywhere.

For Salesforce, the purchase of the corporate messenger Slack will be the largest deal in the 21 years of the company's history

By integrating Slack with its own software, Salesforce could provide customers with a versatile workplace that has all the features they need. In the first years after the launch, Slack gained popularity precisely due to the integration capabilities with third-party services - such as cloud file stores or e-mail.

The opportunities for both companies are huge together , "said Slack co-founder and CEO Stuart Butterfield in a statement.  "This is the most strategic combination in software history, and I can't wait to get started.

Stuart Butterfield will continue to lead the Slack team after the close of the deal, scheduled for May-July 2020. It will be considered by regulators, as well as, probably, the presidential administration. USA The company will remain independent, although it will become the operational division of Salesforce and will be integrated with the Salesforce Cloud direction.^[1]

According to   Logan Purk, senior analyst at financial consulting firm Edward Jones, the announced deal shows  how competitive the software market has become.

Without a product that changes the rules of the game and big capital, you will be absorbed or fail, "he said.

DA Davidson analyst Rishi Jaluria believes that buying Slack will help Salesforce dive deeper into working on collaboration and business communications tools. At the same time, according to the expert, Slack is also profitable, since it will help the service become more popular among non-technological companies.

According to Reuters, having absorbed Slack, Salesforce will be able to offer the business a single platform for interaction between employees, customers and partners with each other, as well as with applications that they use. As a result, Salesforce will be able to expand its corporate-level product portfolio, and Slack will be able to further benefit from the trend towards remote work, which appeared as a result of the COVID-19 coronavirus pandemic, the publication said.

"Marriage concluded in heaven": Salesforce announced the purchase of the Slack messenger for $27.7 billion

This deal will be a serious blow for Microsoft,  said  Wedbush analyst Dan Ives. He  noted that the joint service can be considered a direct competitor to the Microsoft Teams product, which, according to the expert, prevents Slack from growing. After the deal in this market, there will be a "two-horse race between Microsoft  and Salesforce," Ives is sure.

Salesforce will include Slack in its service sets, as well as ensure the integration of the messenger with its products. "Slack will be deeply integrated into every Salesforce cloud" and will be "a new interface for Salesforce Customer 360," the press release said.

Slack filed an antitrust complaint against Microsoft

Slack Technologies, the developer of the corporate messenger of the same name, filed an antitrust complaint with the European Commission, accusing Microsoft of non-competitive behavior. Slack believes that Microsoft uses its dominant position to distribute the competitive corporate platform Microsoft Teams, along with the widely used office suite of applications Microsoft Office^[2].

It is noted that Slack accuses Microsoft of illegally combining Teams applications with Microsoft Office 365 tools. Slack claims that Microsoft forces Office users to install the Teams software, blocks its removal, and makes certain types of interaction with competitors impossible.

WSJ Notes that Slack Technologies manages a popular enterprise employee instant messaging application. The American Microsoft was founded in 1975 Bill Gates and. Paul Allen Headquartered in,. Redmond Washington The company specializes in development, in software particular, Microsoft is a developer. operating system Windows

2019: Exit to the exchange

On June 20, 2019, the corporate messenger Slack, which was very fond of Russian IT teams, entered the exchange. The first day of trading was very successful for the company.

To turn into a public company, Slack chose an unconventional IPO, which is organized by investment banks holding meetings with investors, where the sale price of securities is determined.  A so-called direct listing was made, allowing the company to register shares for free sale without preliminary trading with the participation of investors. Their value is based on supply and demand.

Beloved by Russian IT teams, the Slack messenger entered the exchange

This procedure does not require the company to raise capital through the issue of shares on the exchange. Therefore, before placement, the price at which investors are ready to buy shares before trading is not determined.  The New York Stock Exchange (NYSE), which Slack chose as the platform for trading its shares, set only a reference price - an approximate estimate for starting trading.

The reference price was $26, which corresponded to a market capitalization of $15.7 billion. At the opening of the NYSE, the value of Slack securities was $38.5, which was 48% higher than the reference price. By the close of the exchange, the quotation rate stopped at $38.62, and market capitalization exceeded $20 billion. During the first day of trading, the company's maximum share price reached $42, and capitalization - $23.2 billion (taking into account all employee-owned shares, including in the form of options). According to the results of the last round of private financing, investors estimated the company at $7 billion.

Slack shares are listed on the New York Stock Exchange under the ticker WORK, although the SK designation was originally chosen. The company wanted to emphasize the importance of using its service for working purposes with a new ticker. In the original prospectus to the IPO, the word "work" was mentioned more than 40 times.

The messenger will be the second large company to hit the exchange without an IPO. In April 2018, according to the direct listing scheme, the Spotify music service was released on the exchange. Such a stock placement model makes it possible to significantly save on the banking commission.

We believe that direct listing is a more effective and efficient way to enter the exchange without the restrictions imposed by the IPO,   "the news agency quoted Reuters Slack CFO Allen Shima as saying.

Fiverr International CEO Misha Kaufman noted that direct listing is appropriate for companies that have been collecting large amounts in the private market for a long time and want to give their investors an advantage.

Slack co-founder and CEO Steward Butterfield near the New York Stock Exchange before trading company shares

To conduct a direct listing, the company must be well known to investors so that its business does not have to be understood. Slack refers to just such companies.

After entering the Slack exchange, co-founder and CEO Stuart Butterfield became a billionaire - the cost of his 8.6 percent stake was $1.6 billion.  Accel, the largest shareholder in Slack, has a package of securities worth $4.6 billion.^[3]

2018

Blocking user accounts in sanctioned countries

In December 2018, Slack began blocking accounts for visiting countries that fell under US sanctions. The administration of the corporate messenger explained this with errors when updating the geolocation system.

Complaints about blocking accounts in Slack began to appear on December 20. The letters that users received from the messenger said that the reason for the blocking was to visit the regions from the US sanctions list. We are talking about Crimea, Cuba, Iran, North Korea and Syria.

Slack began to block users who visited the Crimea

TechCrunch writes that notifications were received by users of free public Slack groups. Access to paid accounts has been preserved in almost all cases. From the locks suffered those who in recent years spoke on social networks about trips to Iran. The company apologized for what happened and gave explanations:

We are aware of the inconvenience this caused, and sincerely apologize to those who suffered from our actions... We have updated our system to apply geolocation information that is based on IP addresses. This has resulted in the deactivation of accounts linked to embargoed countries. We use only IP addresses to perform these actions and do not have information about the nationality or ethnicity of our users.

Slack restored access to most blocked accounts. In the future, it is planned to limit access to the service from sub-sanctions territories, but not block accounts using the appropriate IP addresses. In addition, residents of regions that have fallen under US sanctions will be properly informed about the impossibility of using the service.^[4]

Slack has previously limited access to the accounts of those who used the service in Cuba, Iran, North Korea, Sudan, Syria and Crimea. In February 2018, users also complained about such a problem and received an answer on the messenger's official Twitter page.

Purchase of Astro e-mail service

On September 24, 2018, Slack Technologies announced the purchase of Astro's email service. This acquisition, according to Quartz, has become the largest for the corporate messenger, but the cost of the transaction is not disclosed. More details here.

Raising $400 million at a company valuation of $7 billion

On August 7, 2018, it became known about the new round of funding for Slack. As part of this investment transaction, the company raised about $400 million and received a value estimate of more than $7 billion. In September 2017, the corporate messenger, according to investors, was worth $5.1 billion.

The $400 million Slack funding round was led by General Atlantic and Dragoneer. We are talking about the largest amount that the service managed to get from investors at the time of this transaction.

In August 2018, Slack has a record amount of $400 million

According to TechCrunch, large investments in Slack indicate the prospects for services for corporate communication. Their audience is growing steadily, and in the future Slack and other similar products can supplant other means of communication between employees.

In addition, large investments and valuation emphasize Slack's leading position in the corporate messenger market, the publication reports.

Slack, which employs more than a thousand employees by August 2018, is not going to enter the exchange. The funds raised will help the service grow and compete with products such as Microsoft Teams and Facebook Workplace.

At the same time, Slack itself provides financial support to companies that want to use the service. To do this, the Slack Fund operates, through which the company hopes to create an ecosystem of partners that will help the service find the missing functions. From the beginning of 2018 to May, at least 11 companies received funds from the Slack Fund, and the number of applications connected to Slack as part of the partner business model exceeded 1,500.

As of May 2018, Slack had more than 8 million users who launched the service at least once a day. Of these, 3 million people used the paid functions of the messenger.^[5]

2017: Business estimate of $5.1 billion

In September 2017, Slack attracted more than $250 million in investments and received a business valuation of more than $5 billion. The deal to finance the corporate messenger was led by the Vision Fund, created by the Japanese telecommunications giant SoftBank. Among the investors is also the American venture capital company Accel.

Corporate messenger Slack valued by investors at $5 billion

According to the results of this transaction, the market value of Slack Technologies, according to investors, amounted to $5.1 billion. During the previous round, held in the spring of 2016, the company cost $3.8 billion. That time she managed to raise $200 million.

For all the time, Slack has attracted $841 million in investments, making it one of the most expensive startups in the field of corporate software solutions.

As Slack CEO Stewart Butterfield told Bloomberg, the company still has undeveloped funds from the previous round - about $591 million. Therefore, the money received in September 2017 will not be spent, but will remain to provide "operational flexibility."

According to the head, additional capital will help increase the number of large customers, as well as retain existing employees and attract new ones.

We have many large customers, and the largest among them are the most conservative. When they transfer tens of thousands of people to Slack, they want to be sure that we will work actively. But this especially helps potential newcomers who come to our work. We are still competing with Facebook and Google, which make attractive offers, "said Stuart Butterfield.

Earlier, Slack Technologies announced expansion into the markets of Germany, France, Spain and Japan, where it will compete with corporate instant messengers from Microsoft and Atlassian. The company plans to make an initial public offering of shares no earlier than 2018, said Stuart Butterfield.^[6]

2016

In April 2016, Slack Technologies in Round F raised $200 million in investments from 7 investors led by Thrive Capital. The company was valued at $3.8 billion.

2015

On April 15, 2015, an additional $160 million was announced in Series E from Horizons Ventures, Digital Sky Technologies (DST Global), Index Ventures, Spark Capital and Institutional Venture Partners, as well as all investors in rounds C and D. At the time of the round, Slack had 125 employees, 750 thousand users, 200 thousand paid accounts (98% once chose an expanded tariff continue to pay). Butterfield noted that the money will fall into a bank account, since the company has not even begun to spend $120 million last round. They will be used as insurance for the future.

2014

After the launch, the company had two large investment funds. On April 25, 2014, it became known that in the C series, Slack raised $42.75 million from funds from Andreessen Horowitz, Accel Partners and The Social + Capital Partnership. At that time, the service had 60 thousand daily users, of which 15 thousand were paid. In October 2014, a $120 million D round was held, led by Kleiner Perkins Caufield & Byers Russian and Google Ventures. Investors from the previous round also joined them. Slack was valued at $1.12 billion. At that time, according to the company, 268 thousand people consisting of 30 thousand teams used the service, of which 73 thousand chose a paid tariff. Together with Butterfield, the company's board of directors includes representatives from each fund: John Doerr (KPCB), M. G. Siegler (GV), Andrew Braccia (Accel), John O'Farrell (Andreessen Horowitz) and Amamoon (+ Mouse) According to Butterfield, the funds raised are planned to be used to accelerate growth. At the same time, Slack never spent on marketing and hired the first CMO only in November 2014, having already become a billion-dollar company by that time.

Notes