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When Slack raised a $120 million round in October of last year, which valued it at $1.12 billion, it came out of nowhere. Now the workplace is back, only six months later, with an even bigger round, which has more than doubled its valuation.
The company has now raised a $160 million round, it was revealed on Thursday, which puts its current valuation at $2.8 billion.
Investors in the round include Horizons Ventures, Digital Sky Technologies (DST Global), Index Ventures, Spark Capital Growth, and Institutional Venture Partners (IVP). All existing investors participated in the round, including Accel Partners, Andreessen Horowitz, The Social+Capital Partnership, Google Ventures, and Kleiner Perkins Caufield & Byers (KPCB).
Slack had previously raised a total of $180 million, and this current round gives it a total of $400 million in venture capital. News of Slack's funding broke last month.
What's so astounding about Slack's rise is how quickly is has happened: the Slack product only went live in February last year.
Slack is a spinoff of Tiny Speck, is a company that was started by Stewart Butterfield, who previously started Flickr. Its first product was a Flash-based multiplayer online game called Glitch. After Glitch was shut down, Tiny Speck launched Slack in August 2013.
The company isn't just growing its valuation at a rapid pace, but its user base as well. It is now used daily by over 750,000 people, and has over 200,000 paid seats. Both daily active users and paid seats have more than doubled since the beginning of this year.
What Slack does it similar to Yammer, the enterprise network that was bought by Microsoft for $1.2 billion in 2012. It's a workplace collaboration network that seeks to bring team communication onto a single platform. It integrates with services that include Twitter, Dropbox, Trello, Asana, Google Docs, JIRA, MailChimp, Stripe, Zendesk and others to help consolidate team data.
A few of Slacks customers include Expedia, Intuit, Citrix, Dow Jones, Motley Fool, Buzzfeed, Medium, Times of London, Rdio, Pandora, Paypal, Urban Outfitters, Blue Bottle Coffee, Sony, Dell, ITV, NBCUniversal, TV4, Shutterstock, Stripe, Braintree, Adobe, Typekit, Behance, Foursquare, Yelp, Automattic (Wordpress), eBay, Tumblr, Trunk Club, Seagate, HBO, Vox Media, Gawker Media, Eventbrite, Quora, Slate, DigitalOcean, NVIDIA, AOL, Venmo, Salesforce, Autodesk, Nordstrom, Live Nation and Airbnb.
In a series of tweets, Chamath Palihapitiya, founder of Social+Capital, explained why his firm invested in Slack.
2/ We are starting to finally chip away at the company-wide monopoly MS Outlook+Exchange have had around collaboration and communication...— Chamath Palihapitiya (@chamath) April 16, 2015
3/ There are many tools that are good w/i small groups or depts, but @SlackHQ is the first product that has utility for the entire company— Chamath Palihapitiya (@chamath) April 16, 2015
4/ It's pretty inspiring to run into the varied types of companies that now use it to communicate, collaborate and generally get shit done— Chamath Palihapitiya (@chamath) April 16, 2015
5/ The true test will happen over the next few years when with a plethora of new features, we ask ourselves the holy grail question:— Chamath Palihapitiya (@chamath) April 16, 2015
6/ "When did we start spending more time in Slack than Outlook?!?!?!? when did email traffic fall off a cliff?!?!!?"— Chamath Palihapitiya (@chamath) April 16, 2015
7/ It will be interesting to see what happens to AD, LDAP, Outlook, Exchange in a mobile-only world where messaging within and across co's..— Chamath Palihapitiya (@chamath) April 16, 2015
8/ becomes as easy as emailing does. best of luck to @SlackHQ— Chamath Palihapitiya (@chamath) April 16, 2015
In addition to the funding, it was also announced that Mike Volpi, partner at Index Ventures, has joined the board of directors at Slackas an observer. The current board of directors consists of CEO Stewart Butterfield, Andrew Braccia of Accel, John O’Farrell of Andreessen Horowitz, and Mamoon Hamid of Social+Capital,
John Doerr, of KPCB, and M.G. Siegler, of Google Ventures, were named as observers in the last investment round.
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