I love the software, though this kind of feels like the Dot Com bubble all over again.
Companies didn't even have revenues back then.
Slack Is Going Public at a $16B Valuation
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Re: Slack Is Going Public at a $16B Valuation
#12I agree they’re a great product org, but not sure I agree they’re a $16B company — messaging apps tend to be cyclical, so I’m not sold on their long term viability. It’s just too easy for new IM platforms to take root inside a company once the old one gets too noisy.
Given the growing grassroots backlash against the entire Slack Way, I’m not convinced they have a long enough runway to pivot to a stickier product before something shinier comes along.
Re: Slack Is Going Public at a $16B Valuation
#13Their valuation stems from MAUs and majority are on the generous free tier. Do investors really think they can monetize the free users?
Re: Slack Is Going Public at a $16B Valuation
#14Is 16B really too high of a valuation when Atlassian is double the market cap at 32B? Both have similar products (collaboration/productivity) and are extremely sticky.
Atlassian was already profitable weren’t they?
There’s a disclaimer these unicorns put in their S1s - “we are not profitable and may never be” - Atlassian probably didn’t have to do that.
That should count for something right?
Re: Slack Is Going Public at a $16B Valuation
#15Is 16B really too high of a valuation when Atlassian is double the market cap at 32B? Both have similar products (collaboration/productivity) and are extremely sticky.
Slack has a broader userbase inside enterprises.
Do you have a citation on that? My experience is the other way around.
Re: Slack Is Going Public at a $16B Valuation
#16It makes no sense for me. It's just a web frontend on top of an irc chat. $16B for that is a complete insanity.
This is an insubstantial business, doing an even more insubstantial product, with a sole criteria of it being a "big thing" being some smart banker analyst saying so — that's a hello from dotcom bubble era
At such valuation, it will take them ~100 years just to earn its price from ads sales
Re: Slack Is Going Public at a $16B Valuation
#17I love the software, though this kind of feels like the Dot Com bubble all over again.
I would encourage people to read the Pets.com 10-Q to understand what the dot com bubble was like from a corporate finance perspective, because there are deeper lessons than "Some companies with substantial Internet operations IPOed."
https://www.sec.gov/Archives/edgar/data/1100683/000089161800...
Pets.com paid $10.5M for pet food then sold it for $8.7M, while needing $23M to keep the lights on that quarter.
Compare to https://sec.report/Document/0001628280-19-004786/ :
Slack, unsurprisingly because it sells software, has positive gross margins rather than negative gross margins; they're healthy at ~80%. They appear to be able to turn $1 of sales and marketing spend in Year 1 into > $1 of software revenue in year 2. Their churn rate on a dollar basis is 43%. Excuse me, -43%; a cohort of SaaS customers paying $100M in year 1 will pay $143M in year 2 due to growth in number of seats more than offsetting churning accounts.
There is no price at which a rational person should want to own Pets.com. There is, very clearly, a price at which a rational person should want to own Slack.
Re: Slack Is Going Public at a $16B Valuation
#18Is 16B really too high of a valuation when Atlassian is double the market cap at 32B? Both have similar products (collaboration/productivity) and are extremely sticky.
Atlassian has a wider suite of products. I would say HipChat is the Slack alternative. Slack has nothing like Jira, BitBucket, or Trello. And Atlassian is more developer centric whereas Slack is monetizing enterprise users.
Re: Slack Is Going Public at a $16B Valuation
#19It makes no sense for me. It's just a web frontend on top of an irc chat. $16B for that is a complete insanity. This is an insubstantial business, doing an even more insubstantial product, with a sole criteria of it being a "big thing" being some smart banker analyst saying so — that's a hello from dotcom bubble era At such valuation, it will take them ~100 years just to earn its price from ads sales
What a complete nonsensical comment. Is Facebook just a frontend on top of a user DB?
Re: Slack Is Going Public at a $16B Valuation
#20Their valuation stems from MAUs and majority are on the generous free tier. Do investors really think they can monetize the free users?
2018 revenue was $400 million, ~doubled the previous year - Slack isn't a company with just a ton of free users and no monetization