Slack, the workplace communications platform, has taken off like a rocket since launching in 2013 and now has more than 8 million daily active users and 70,000 teams paying to use it. Now the startup of the same name has closed its latest round of funding to fuel its growth. The company said it has raised another $427 million in a Series H round that values it at over $7.1 billion, led by Dragoneer Investment Group and General Atlantic.
The news confirms details first reported by TechCrunch earlier this month.
Other investors in this round include T. Rowe Price Associates, Inc., funds advised by Wellington Management, Baillie Gifford and Sands Capital, along with unnamed investors.
“Slack is an exceptional company that is revolutionizing the way people collaborate, and we look forward to a long term partnership with the Slack team as they continue to grow the business,” said Marc Stad, Founder and Managing Partner of Dragoneer, in a statement.
Before this round, Slack had raised $841 million with its 40 or so previous investors reading like a who’s who of the VC world, including a number of individuals as well as the firms SoftBank, Accel, Kleiner Perkins, GV, DST, Index, Andreessen Horowitz, Social Capital and many more. Its most recent round before this was a SoftBank-led $250 million round at a $5.1 billion valuation, pointing to a huge leap in Slack’s price since September 2017.
Over the years, there have been a number of startups and larger tech giants attempting to build workplace communications platforms, but Slack appears to have been the right platform at just the right moment. The public appetite for social media and using digital platforms to communicate has exploded in recent times, and Slack’s easy interface, combined with the ability to integrate just about any other piece of software or app that you might use in your office into its conversation stream, has helped it take off.
That has not come without a sharp rise in competition, with the likes of Facebook, Microsoft and others all developing their own platforms to take it on, either because they see an opportunity to jump on the trend to gain new customers and revenue streams, or to hang on to those that it already has (and possibly before Slack snaps them up).
In previous rounds, Slack’s CEO and co-founder Stewart Butterfield has said that the company raises “opportunistically.” That is, it doesn’t have to raise money because it’s already making money and still has some in the bank, but as long as VCs are knocking, it’s worth taking the funding if it’s coming in at good valuations because you never know what might lie ahead.
That “ahead” appears to be now. The company did not specify how it plans to use this funding in the short statement it sent to TechCrunch (we’re asking), but it’s been buying up competitors (like Hipchat) in a bid to scale up and consolidate, in addition to ramping up its own offerings to target bigger and more lucrative customers beyond the smaller businesses and startups that helped the company get its start.
“Slack has made strong progress in a very short time in this new era of enterprise collaboration. Our investment represents our belief in the company’s vision and leadership team, together with the product’s potential to increase productivity and change the way people work on an even larger scale,” said Alan Tu, Equity Research Analyst, T. Rowe Price Associates, Inc., in a statement.
“There is still enormous potential to change the way that people and organizations collaborate and work together,” Slack noted.