US-based enterprise communication platform developer Slack filed for a $100m direct listing on the New York Stock Exchange on Friday that will enable corporate investors Comcast, Alphabet and SoftBank to exit.
The direct listing will involve no new stock being issued and will instead allow existing shareholders to sell shares. Instead of being handled by underwriters, a market maker will set the price based on buy and sell orders from NYSE brokers.
Slack’s workplace communication software has more than 10 million daily active users across some 600,000 companies, almost 90,000 of which maintain paid subscriptions.
The company made a $139m net loss in 2018 but boosted revenue 82% to approximately $400m. It also has more than $840m in cash on hand, having raised a total of $1.27bn in funding since it was founded in 2009.
Venture capital firms Andreessen Horowitz, Accel and Social Capital provided Slack’s early funding, while it was still a game developer, and returned for a $120m series D round co-led by GV, a subsidiary of internet and technology group Alphabet, and Kleiner Perkins Caufield & Byers (KPCB) in 2014.
The series D round valued the company at $1.12bn and all the participants returned for a $160m series E the following year that included Horizons Ventures, DST Global, Index Ventures, Spark Capital Growth and IVP, and which was closed at a $2.8bn valuation.
GV and Comcast Ventures, mass media group Comcast’s corporate venturing unit, joined existing investors including Accel, Social Capital and Index Ventures to invest a further $200m in a 2016 series F round that valued Slack at $3.8bn.
Vision Fund, the investment vehicle managed by telecommunications and internet group SoftBank, invested $135m to lead Slack’s $250m series G round in September 2017, participating alongside investors including Accel and Social Capital at a $5.1bn valuation.
The company received $150m from Vision Fund in November 2017 and $12.7m the following month according to the filing, before adding $427m in an August 2018 series H round featuring $26.7m from Vision Fund.
Dragoneer and General Atlantic co-led the round, which also featured Baillie Gifford, Sands Capital, funds advised by Wellington Management, funds and accounts advised by T. Rowe Price and existing backers that included Accel, which supplied $50m.
Slack’s directors and executives intend to sell just over 3 million shares between them according to the filing, and none of the corporate investors are listed among those planning to sell.
The nature of the offering means the investors will retain their stake size once Slack has floated. SoftBank is the only corporate with a stake of 5% or more, holding 7.3% of Slack’s shares. The company’s largest investors are Accel (24%), Andreessen Horowitz (13.3%) and Social Capital (10.2%).
Slack was valued at $7.1bn in the August round but investors are selling shares on private markets for $28 each, valuing the company at approximately $16.7bn, private stock marketplace Forge Global told CNBC on Friday.
