Slack to raise up to US$160m in a deal that could value start-up at US$2.76bn

27 Mar 2015

If you haven’t considered using Slack you’ve been hiding under a rock. If you haven’t heard of Slack you’ve been hiding beneath a boulder. The workplace collaboration start-up is to raise US$160m.

Led by Stewart Butterfield, Slack is understood to have signed a deal with investors to raise up to US$160m in a funding round that will value the company at up to US$2.76bn.

The investment round includes Institutional Venture Partners, Horizons Ventures, Index Ventures and DST Global, the investment firm that took an early stake in Facebook when it was just a start-up.

The investors have committed US$135m to the round and Slack has the option to raise a further US$25m.

The biggest contributor to round is Hong Kong billionaire Li Ka-Shing who has invested US$50m in the round.

Butterfield’s Slack is quickly being heralded as one of the current crop of unicorns – Silicon Valley start-ups valued at over US$1bn – that actually could go the distance.

No slackers here

Canada-born Butterfield co-founded image sharing site Flickr in 2002 with Caterina Fake and Jason Classon, originally as a video games business. Flickr was acquired by Yahoo! in 2005 and Butterfield stayed on as product manager for three years.

Stewart Butterfield, Slack founder

In 2009 he launched online gaming company Tiny Speck but the company’s main gaming title Glitch closed down in 2012.

Butterfield started Slack in 2013. Slack is a project management tool that was created by the Glitch team. Slack has quickly become the tool of choice for a growing number of creators, designers, entrepreneurs and software developers and is growing to become a mainstream productivity tool for businesses.

As of August 2014, Slack has garnered US$1.5m in revenue.

The tool has grown at a weekly rate of 10pc with more than 120,000 daily users registered in the first week of August 2014.

The tool’s popularity is solely based upon word-of-mouth.

Teamwork image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years