April 2015: Why Slack raised $160 million at a $2.8 billion valuation, by Dan Primack of Fortune
Adam Rifkin stashed this in Slack
Slack co-founder and CEO Stewart Butterfield explains:
“We’re kind of in the best environment ever to raise money and while things could always get better and we’ll wish we had waited another six months, having a couple hundred million bucks in the bank is a good hedge about what might happen in the future.”
Dan Primack adds:
If this argument sounds familiar, it’s probably because we put it forth last month.
Butterfield, who says Slack still has not tapped any of last October’s $120 million, adds that he’s not terribly concerned that a macro pullback might lead to Slack later raising new capital at a lower valuation. “There’s always some downside risk to any business deal, but we’re very capital efficient and never really need to raise money again,” he says. “This valuation helps us recruit new employees and gives a high value to our stock when contemplating acquisitions… It would have been imprudent of me not to take it when it was offered.”
February 2014: Slack launches.
Halloween 2014: 268,000 daily users and 73,000 paid seats (27%). [raised $120m on $1.12b]
April 2015: Slack has 750,000 daily users and 200,000 paid seats (27%) (raised $160m on $2.8b]
Slack just might be the fastest growing enterprise company of all time.
Fun quote from TechCrunch:
Asked where Slack would be putting the new funding, Butterfield answered simply, “Into the bank account.” He said that Slack had not even starting spending the $120 million that it raised in October.
So why raise the money now? Because they can. “It’s more of a long term thing,” said Butterfield. “I’ve been in this industry for 20 years and this is the best time in the whole period I’ve worked to raise money. It would be irresponsible for us not to take $160 million right now at that valuation.”
This latest round includes new investment from Horizons Ventures, Digital Sky Technologies (DST Global), Index Ventures, Spark Capital, and Institutional Venture Partners (IVP). Past investors Accel Partners, Andreessen Horowitz, The Social+Capital Partnership, Google Ventures, and Kleiner Perkins Caufield and Byers all participated. The company has now raised $340 million.
Source is Ingrid Lunden:
Stewart asks if you've seen the last episode of Silicon Valley: