Slack hits $5 billion valuation on its journey to IPO

SoftBank led a $250 million funding round for the collaboration firm

Collaboration giant Slack is now worth $5.1 billion, after raising $250 million in a Series G funding round led by SoftBank.

This brings Slack's total funds raised to $841 million, as reported by the Financial Times, and brings the company closer to its dream of an IPO.

Slack's CEO Stewart Butterfield said: "We believe that Slack is the future of work, and this fund reinforces that - providing long-term operational flexibility and resources that prepare us to run Slack as a cash-generating company and move quickly as the market evolves."

Butterfield told the FT that his company is destined for an eventual IPO, though it would not happen until after 2018. He is worried that it is a young company that may not meet its business targets in the next year, which would "make it a rocky ride in the public market".

He also addressed Microsoft's competitor to Slack, called Microsoft Teams, which was launched last year. He said: "I think we probably have a year or, at the outside a year and a half, before it's really competitive", adding: "It's early in their evolution but I would never discount Microsoft's ability to put resources behind it."

Deep Nishar, senior managing partner at Softbank's Vision Fund said: "Slack is the operating system for today's fast moving businesses, enabling teams to work together effectively at a time when businesses need to be responsive to rapid change and disruption. The Vision Fund is excited to invest in Slack and support its mission to help millions of people, teams and companies collaborate and communicate."

Slack's last funding round was in April 2016, when the company managed to raise $3.8 billion. However, the present valuation is nowhere near the $9 billion Slack was expected to be sold for when rumours that buyers, including Amazon, were going to takeover the startup.

The latest funding round was led by SoftBank's Vision Fund and joined by other investors including venture partner firm Accel.

SoftBank led a $473 million emergent tech investment spree earlier this year as it invested in three companies on the west coast of the US. The fund invested in AI, autonomous driving technology and a farming startup.

In May, UK virtual reality firm Improbable raised $502 million in a Series B funding round led by SoftBank. The company uses cloud-based computing to create virtual worlds for use in games and simulations of the real world.

Picture: Slack's San Francisco HQ/Slack

Featured Resources

BCDR buyer's guide for MSPs

How to choose a business continuity and disaster recovery solution

Download now

The definitive guide to IT security

Protecting your MSP and your customers

Download now

Cost of a data breach report 2020

Find out what factors help mitigate breach costs

Download now

The complete guide to changing your phone system provider

Optimise your phone system for better business results

Download now

Recommended

Basecamp loses a third of its staff over internal freedom of speech row
Policy & legislation

Basecamp loses a third of its staff over internal freedom of speech row

3 May 2021
Microsoft Teams will soon make it easier to switch calls between devices
video conferencing

Microsoft Teams will soon make it easier to switch calls between devices

14 Dec 2020
JetBrains launches collaboration tool targeting software devs
collaboration

JetBrains launches collaboration tool targeting software devs

11 Dec 2020
Basecamp 3 review: More molehill than mountain
project management software

Basecamp 3 review: More molehill than mountain

30 Nov 2020

Most Popular

KPMG offers staff 'four-day fortnight' in hybrid work plans
flexible working

KPMG offers staff 'four-day fortnight' in hybrid work plans

6 May 2021
16 ways to speed up your laptop
Laptops

16 ways to speed up your laptop

29 Apr 2021
How to move Windows 10 from your old hard drive to SSD
operating systems

How to move Windows 10 from your old hard drive to SSD

30 Apr 2021