Slack fundraising points to $2.8bn value

Slack has confirmed its status as red-hot start-up of the moment in the market for online worker collaboration tools, raising a new round of capital that it said put a $2.8bn valuation on the company.

The fundraising comes six months after its valuation topped $1bn with an earlier investment round and less than two years since the launch of the service.

The funding comes as Slack is racing to capitalise on the surge of interest it has stirred up among teams of workers looking for better tools to communicate and access shared data. Rather than expand its range of services for workers, the company is racing to reach as many people as it can with its existing service, said Stewart Butterfield, chief executive.

Slack acts as a basic messaging platform that connects to a company's other online applications, drawing in information as needed.

The latest investment puts a value of more than $3,700 on each of Slack's 750,000 active daily users, a sky-high level for a company that works with a "freemium" business model based on attracting workers with a free service and then trying to sell a premium version to their companies.

However, Slack's audience is expanding rapidly, having doubled already since the start of the year, and some 200,000 workers are covered by its paid service.

Mike Volpi, a partner at Index Ventures which has backed the company, said Slack's rapid growth reflected its "generationally different approach to messaging," based on lessons learned from consumer internet companies. "Slack has reached a level of early traction that's rarely seen on the enterprise side," he added.

Slack faces growing competition in messaging as existing providers of collaboration software respond to its early success and Facebook seeks to capitalise on its huge user base by developing a version of its service for working life.

The relatively basic nature of the messaging platform, in contrast to the more full-featured services from some other online collaboration providers, has led some venture investors to question whether the company's soaring valuation is justified. But Mr Butterfield, who also co-founded Flickr, the photo-sharing service, said Slack would be able to grow faster if it helped workers tap into their existing corporate applications more easily. He added that it could still build a sizeable business with a relatively narrow service if it can reach a large enough market.

The latest $160m investment takes the total the company has amassed to date to $340m and doubles its investor base with the addition of five new investment firms, including Horizon Ventures, DST Global and Index Ventures.

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