How Close Is a Slack IPO?
In an interview with The Australian, the prospect of an imminent Slack IPO (initial public offering) was discussed with CEO Stewart Butterfield. Ahead of this eventuality, Mr. Butterfield has commissioned an external audit. The potential Slack IPO has prompted the adoption of new internal control and security procedures in order to be ready to go public in the markets when conditions are most favorable.
Slack has developed a collaborative enterprise-working platform. It allows employees to talk directly via instant messaging, rather than e-mail, or share files via “drag, drop” mode.
In Butterfield’s view, the ideal timing for a Slack IPO would be 18 months from now. Butterfield suggests that the company is growing too fast now to attract sufficient interest from investors in an IPO. (Source: “Messaging app Slack on track for a quick IPO, if needed,” The Australian, November 24, 2015.)
The startup specializing in real-time chat for businesses has already raised some $340 million and is worth $2.8 billion, which puts Slack in a position to go public as early as 2016. In fact, its early IPO could put Slack among the first in the social enterprise collaboration sector. Thus far, Slack has achieved a minor miracle, managing to avoid spending much of the capital that it has raised, which serves as a backup plan in case market conditions change.
The San Francisco-based company claims to have reached 1.7 million daily active users, which is more than double the 750,000 it had in April. This impressive growth demonstrates the massive demand that exists for the company’s service. (Source: “Slack launches user groups, hits 1.7M daily active users and 470K paid seats,” OOYUZ, October 29, 2015.)
Slack Competitor Atlassian Has Already Filed for an IPO
Despite Butterfield’s predicted timeline, the prospect of a Slack IPO may materialize faster than suggested, because one of the company’s competitors, Atlassian, is about to launch an IPO itself. Recently, Australia-based Atlassian filed its papers with the SEC for a NASDAQ listing under the ticker “TEAM.”
Atlassian’s success should take nothing away from Slack. Ironically, a recent, if temporary, glitch has proven just how popular and valuable Slack has become. On Twitter, several Slack users complained that the application became inaccessible for a few hours recently. The reaction to the interruption, attributed to a third-party network error, was significant, particularly due to the sheer number of tweets complaining about the problem, which lasted all of two-and-a-half hours.
The company can take all those complaints all the way to the SEC ahead of a Slack IPO. Indeed, the thousands of tweets showing users’ disappointment over the outage were each a sign of the company’s rapid and intense growth and the demand for its services 24/7. For many companies, Slack has become an integral component of the way they do business.
The app was launched in 2014 and since then, the company has been reaching an ever-growing number of users. According to the findings in June, the app can count on one million daily active users, including 300,000 users who have paid for the premium version. Slack’s service is geared toward businesses, meaning it’s not competing with countless social networking or standard messaging application providers.
Facebook, Inc. has launched a somewhat similar service, called “Work Chat,” which offers a messaging application for “Android”-based devices coupled to “Facebook at Work.” (Source: “Facebook Launched The Office Version Of Its Messenger App Called Work Chat,” Tech Times, November 20, 2015.) The software is already available on Google Play Store and is virtually identical to Facebook’s “Messenger,” except for one distinguishing feature: chatting and file sharing can only occur with colleagues and other professionals whose companies have set up an account with Facebook at Work. Through “Work Chat,” futile and entertaining chitchat is banned in order to focus exclusively on meetings and projects.
Therefore, Facebook has decided to compete in the enterprise social collaboration sector against Slack, Yammer, and HipChat, which currently dominate the scene and offer a more extensive package of features. For now, it remains to be seen which company will come out on top as we wait for a potential Slack IPO.