This is a case where I see the outrageously high valuation and really do think it's reasonable. They're allegedly adding $1m in annually recurring revenue every 11 days, which is just phenomenal for this young a product. They'll be in range for an IPO in less than 2 years if they want. Slack has just really nailed it and is moving really quickly.
Slack Raises $160M Series E at $2.8B Valuation
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Re: Slack Raises $160M Series E at $2.8B Valuation
#82A friend shared the thought that Slack is a little bit of a scary company to invest in because it was very easy to adopt. "We had no trouble importing our historical message archive and just moving over to this new chat system very quickly. I worry about the long-term stability of this company because if something better comes along, it will be equally fast to switch and never go back," he said. I wonder about this.…
I agree. Slack needs to hustle right now and increase the barrier to entry. Not sure how - integrations help. Maybe asynchronous communication as well?
Some kind of machine learning based answering system that look like Stack Overflow but answers come from analyzing chats!
Re: Slack Raises $160M Series E at $2.8B Valuation
#83How did Slack blow up so quickly? I remember when I first read about it on TheVerge, that same morning the head of our sales team messages the CTO and suggests our company try it out. Next thing I know, every other company is using it. From my perspective, it went from nothing to huge success overnight.
>>How did Slack blow up so quickly?
I am pretty sure even founders don't know. It just happens with a combination of lot of luck and a very good product.
Re: Slack Raises $160M Series E at $2.8B Valuation
#84Did previous investors participate in this round? I can't tell from the wording in the article.
Re: Slack Raises $160M Series E at $2.8B Valuation
#85This is pretty surreal for me. I tried out Slack briefly when they first allowed the public to request accounts. Made a mental note "cool", and moved on. The next year or so I started to see a lot more teams/companies that were getting on the Slack hype-train, and now this. Huge props to the team on this valuation but I'm still quite confused.
We're in a serious bubble right now, IMHO. This valuation is based purely on the fact that all the other hip companies are using it, along with the fact that it is a good product. Valuations should be based on actual financials, but when it comes to tech right now they rarely are. Which is the definition of a bubble, IMHO.
Valuations are also based on future potential (or lack thereof) as well. If a company is currently having a great quarter but there is news that might impact their next quarter, you can bet their stock will drop before their financials even take a hit. It works both ways.
Obviously based on their current financials this valuation is absurd, but given how fast they have grown and how many companies have picked up their product, I would put my money on them justifying this valuation in the future.
Re: Slack Raises $160M Series E at $2.8B Valuation
#86Can someone with more experience comment on the terms of the investment itself? Why would people invest in this company if they haven't even begun to spend the $120M of their series D money yet? For those of us outside of Silicon Valley who don't have the same funding climate, what's it like?
There's fear of missing out for the investors...every investor in Silicon Valley wants to get in on the next Facebook or Google, and the investing environment there is intensely competitive. For the entrepreneurs though, I am left scratching my head as to why they would accept this money, given the massive amount of risk and responsibility you take on when you accept this money. If you don't need the money, why would…
I imagine that Slack's founder, who was formerly co-founder of Flickr, is experienced enough that he could avoid a lot of the pitfalls of raising too much money such as losing control of the board.
Since this isn't to add runway, it doesn't make much sense unless he's not planning on selling to another company anytime soon. By my estimation, Slack is not too far from being profitable (or able to get that way), with ARR somewhere between $15M - $30M and only 125 employees.
With this big war chest Slack could buy or build a few other collaboration tools. It'd be great to have a competitor to Google Apps at a similar price point.
Re: Slack Raises $160M Series E at $2.8B Valuation
#87This is pretty surreal for me. I tried out Slack briefly when they first allowed the public to request accounts. Made a mental note "cool", and moved on. The next year or so I started to see a lot more teams/companies that were getting on the Slack hype-train, and now this. Huge props to the team on this valuation but I'm still quite confused.
Something about this, along with all the other absurdly high private financing rounds currently taking place seems incredibly off. As an entrepreneur, I want access to the cheapest capital I can get, but at the same time in private rounds want partners who can open doors and help break down barriers. Slack is big enough now that the second part shouldn't be an issue (same with Uber, AirBnB, etc). Selling equity at th…
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Re: Slack Raises $160M Series E at $2.8B Valuation
#88Earlier quoted context omitted.
Isn't this a legal requirement? http://en.wikipedia.org/wiki/CAN-SPAM_Act_of_2003#Unsubscrib... Technically the law is only that you have to honor them within 10 days, but I've seen a bunch of sites with one-click unsubscribe nowadays.
It's not just unsubscribe. They let you turn off emails for an hour, a day, etc. Really convenient if you're generally interested in notifications, but just need a little break. Another example: when you change your password, Slack will send you a special link to sign-in on mobile so you don't have to type out your new password on a tiny keyboard.
Sadly (though necessarily) that email-a-link thing doesn't work if you turn on 2-factor auth.
Re: Slack Raises $160M Series E at $2.8B Valuation
#89Earlier quoted context omitted.
We're in a serious bubble right now, IMHO. This valuation is based purely on the fact that all the other hip companies are using it, along with the fact that it is a good product. Valuations should be based on actual financials, but when it comes to tech right now they rarely are. Which is the definition of a bubble, IMHO.
I feel similarly. Of course there are tons of people saying "no no no, it's not a bubble", but historically, bubbles were never acknowledged until they bursted.
"but historically, bubbles were never acknowledged until they bursted."
What does it mean when there are more people shouting bubble than those who deny it?
Re: Slack Raises $160M Series E at $2.8B Valuation
#90Earlier quoted context omitted.
There's fear of missing out for the investors...every investor in Silicon Valley wants to get in on the next Facebook or Google, and the investing environment there is intensely competitive. For the entrepreneurs though, I am left scratching my head as to why they would accept this money, given the massive amount of risk and responsibility you take on when you accept this money. If you don't need the money, why would…
Why do you think there is any more risk/responsibility in raising money in an E-Round versus an IPO?
Well, first it depends on the valuation, but that goes for any equity financing round. But also, it depends on the type of investor you are taking on, and their expectations for returns to fit in their profile.
Private investors tend to invest in higher risk/reward equities, meaning you need to achieve higher growth rates to satisfy them. I am guessing many of the companies raising massive private rounds now need to still grow significantly before a liquidity event could justify the investor's investment (once you go public, the pressure isn't as high to achieve 2-3x growth year over year). Publicly traded technology stocks are expected to grow at most 20-30%/year, without further diluting the equity pool. Every new private financing round makes the pool a little smaller, meaning you still need to grow even faster to achieve the returns required by your investors.
In addition, once you IPO, you have access to many other forms of financing that are significantly cheaper than selling equity.