The enterprise messaging company took its total funding to $540m, securing $200m at a $3.8bn valuation from backers including Alphabet and Comcast, showing there is still big late-stage money available for the right kind of company.
US-based messaging platform developer Slack has raised $200m in series F funding from investors including internet firm Alphabet and mass media group Comcast, TechCrunch reported on Friday, indicating that there is still substantial VC money out there for the right bets.
Alphabet and Comcast took part in the round through their respective corporate venturing subsidiaries, GV and Comcast Ventures, investing alongside existing Slack backers including venture capital firms Accel Partners, Index Ventures and Social Capital. The company secured the funding at a post-money valuation of $3.8bn.
Originally founded as game developer Tiny Speck, Slack subsequently pivoted in 2013 to focus on a workplace messaging tool it had developed in-house. The latest round brought the company’s overall funding to $540m since 2009.
GV, then called Google Ventures, participated in the $160m series E round Slack closed in April 2015, together with Index, Horizons Ventures, DST Global, Spark Capital Growth and Institutional Venture Partners. Google Ventures had already co-led Slack’s $120m series D round in 2014 with VC firm Kleiner Perkins Caufield & Byers.
The series F round follows a period of significant growth for Slack, which has increased its user base from 750,000 to 2.7 million in the space of a year, quadrupling its paid users to 800,000 over the same period.
The company formed an $80m corporate venturing fund in December 2015 that will support startups developing ‘Slack-first’ apps, as well as tools that are compatible with its platform, and introduced a voice chat feature called Slack Calls last month. Once Slack Calls has been fully rolled out across all Slack’s platforms, it will seek to launch a video chat feature.
Slack co-founder and CEO Stewart Butterfield said in a statement: “As has always been the case, we are taking this opportunity to further secure our leadership position as we continue to execute on our ambitious growth plans.
“This capital adds to our existing reserves and increases our ability to focus on an uncompromising long-term, strategic view.”
The valuation, $1bn greater than its series E round, is perhaps the most significant element of the series F, which comes at a time when several other large startups are having to raise money at level or even down valuations. Snapchat received $175m from Fidelity last month at a $16bn valuation, the same at which it raised cash in May 2015, while Flipkart looks set to join the likes of Doordash and Foursquare in raising down rounds.
The fact Slack was able to raise money at a substantially higher valuation, less than a year after its last round, shows there is still funding available for the right companies. In this instance, Slack has demonstrated rapid growth on the back of relatively little advertising, launching its first large-scale marketing campaign less than six months ago, and its growth potential remains considerable.
The platform is currently focused on enterprises, where corporate accounts can add users and revenue relatively rapidly, but it still has room for some major traction there. However, there is no reason why it would have to stick to business.
Asia-based messaging platforms like WeChat and Line have positioned themselves as gateways to all manner of e-commerce offerings but Slack need not even go in that direction. Facebook has demonstrated how large a social media company can grow, and if Slack can expand into a social as well as a group messaging company the sky could be the limit.
