US-based enterprise communication platform Slack has raised $250m in funding, “much of which” came from telecommunication firm SoftBank’s Vision Fund, the Financial Times reported today.
The round, which valued Slack at $5.1bn post-money, also featured venture capital firm Accel, according to Bloomberg. Reports in July this year suggested Accel would co-lead the round with SoftBank.
Slack has built a communication platform that has 9 million weekly active users and 6 million daily active users, according to Bloomberg, 2 million of which are paid subscribers. It launched a feature last week that will for the first time enable users to communicate with users outside their businesses.
The company has a 100% annual growth rate and has reached $200m in annual recurring revenue, the FT reported, adding that it has now raised $841m altogether.
CEO Stewart Butterfield told Bloomberg it still had much of its earlier funding in reserve, and that the new capital was for operational flexibility. He added that a large fundraise would reassure customers and potential hires.
“We have a lot of large customers,” Butterfield said, “and the bigger ones are a lot more conservative.
“As they move tens of thousands of people over to Slack they want to make sure we are going to be around. But it especially helps with potential recruits. We still have to compete with Facebook and Google and they give substantial offers there.”
SoftBank had wanted to invest more money, Butterfield told the FT, and Slack expects it to remain as an investor after it goes public. The company currently expects to launch an initial public offering in 2018.
Slack last raised money in an April 2016 series F round backed by GV and Comcast Ventures, subsidiaries of internet group Alphabet and mass media firm Comcast, as well as VC firms Accel, Index Ventures and Social Capital, which valued it at $3.8bn post-money.
GV and Kleiner Perkins Caufield & Byers had co-led Slack’s $120m series D round in 2014, investing alongside Accel, Social Capital and Andreessen Horowitz.
Slack secured another $160m at a $2.8bn valuation from GV, Index, Horizons Ventures, DST Global, Spark Capital Growth and Institutional Venture Partners the following year.