Slack kick-starts this year’s tech IPO race as it files to go public

5 Feb 2019

Slack office in London. Image: Slack

Workplace collaboration giant Slack is officially going public and will likely be followed by a slew of other tech firms.

Slack is making official moves to go public, five years after its official launch, according to a statement released by the company on Monday (4 February).

Reports about the San Francisco-based firm’s intention to go public ramped up in the autumn of 2018, with sources stating the company had been working towards that goal since the previous year.

Slack has raised more than $1bn in venture capital investment, including a massive funding round in August 2018. The business is estimated to be valued at approximately $7.1bn.

Just last week, the company announced major growth in the number of customers paying for its service and cited a flourishing user base in a variety of markets, including Japan.

Direct listing ahead for Slack

In its statement, Slack said: “Slack Technologies Inc today announced that it has confidentially submitted a draft registration statement on Form S-1 with the Securities and Exchange Commission (the ‘SEC’) relating to the proposed public listing of its Class A common stock.

“The public listing is expected to take place after the SEC completes its review process, subject to market and other conditions.” Slack hired Goldman Sachs to lead its IPO in December, according to Reuters.

The Information reports that Slack is planning to pursue a direct listing, as Spotify did last year. This means that it can begin trading its shares on a stock exchange without being required to raise new funds.

Traditionally, IPOs involve the sale of stock to public markets in advance. The company apparently has approximately $900m in cash on its balance sheet, as of October last year.

Race to go public

Other tech companies set to join Slack on the public stock market include bitter rivals Uber and Lyft, both of which filed IPO paperwork in December 2018.

At the time, The New York Times reported that Uber had been told it could be worth approximately $120bn in an IPO. Last year’s US government shutdown has slowed progress, as the SEC was unable to examine the two firms’ documentation.

Online scrapbooking and ideas platform Pinterest and property giant Airbnb are also slated to go public this year. The former has hired JPMorgan Chase and Goldman Sachs as underwriters.

Last month, Airbnb announced its second consecutive year of profitability on an adjusted basis, adding that it expects to hit 500m guest arrivals by the end of the first quarter of this year.

Ellen Tannam was a journalist with Silicon Republic, covering all manner of business and tech subjects