Slack Goes Public, But Files Confidentially

One of the hottest IPOS of the year has finally announced it confidentially filed to go public with the United States Securities and Exchange Commission.  This company sells an enterprise collaboration and chat platform that might, essentially, be comparable with Snap, but for business.  Taking the IPO public will put Slack among the Silicon Valley elite with the likes of Uber, Zoom, and Lyft; all of which, collectively could set a record as the biggest cohort of privately-funded multi-billion dollar companies in the public market today. 

At last check, Slack had an estimated value of $7 billion and is backed by notorious venture capital firms like Kleiner Perkins, Google GV, Accel Partners, Andreessen Horowitz, and Softbank.  

Combined, the company raised a total of $1.2 billion in capital.  

It should be noted that Slack grew out of a failed gaming startup called Tiny Speck, back in 2013.  At the time, Stewart Butterfield sold his company—a little photo-sharing web application you might know as Flickr—to Yahoo to start Speck with Cal Henderson.  Of course, Tiny Speck did not work out but the two found success with the chat platform they built for the development team to use for internal communications. 

That chat platform is what grew to become the product they sold as Slack.  Last week, they announced that the app has 10 million consistent daily active users.  Of these, there are 85,000 paid global customers. For the sake of tracking its success leading up to this IPO, the company had approximately $900 million in cash as of October of last year. 

Now, seeing those numbers is should be more than obvious that an IPO was inevitable, but the announcement comes at quite a time. The SEC was closed for most of January, of course, because of the federal government shut down and that means companies who filed at the start of the year did not get any feedback on their applications.  

But while all of this seems pretty obvious, the twist in this story is that Slack is now setting itself up to enter the $3.5 trillion health care sector.  You see, Slack is so popular that other companies have emulated their model to become “Slack for healthcare,” etc.  But while these emerging companies might have generated a new product, Slack would already be at an advantage in the field because various practices already use it in their administrative offices.  Time will tell, then, if Slack’s venture into the field will prove more fruitful than allowing smaller competitors to join the interface. 

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