Slack’s total funding stands at $540m

2016-04-03 11:29 - Ellen Huet
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San Francisco - Slack Technologies, the corporate messaging startup, said it raised $200m in its latest financing round. The new funds give the company a valuation of $3.8bn, Slack said in an e-mail.

The investment brings Slack’s total funding to $540m, according to the company. Slack, which introduced its business chat software in 2013, has continued to raise venture capital at a breakneck pace, even as the funding environment has cooled in recent months. Venture investment in startups began to slow late last year, dropping 30 percent in the fourth quarter compared with the previous one, according to research firm CB Insights.

“We are taking this opportunity to further secure our leadership position as we continue to execute on our ambitious growth plans,” Stewart Butterfield, co-founder and chief executive officer of Slack, said in a statement. “This capital adds to our existing reserves and increases our ability to focus on an uncompromising long-term, strategic view.”

Butterfield has been frank about why he keeps raising money even though the company is close to profitable and doesn’t need it. A continuously rising valuation is a helpful recruitment tool when trying to lure talent away from seemingly more stable jobs at Google or Facebook Inc., he said last month. The company said on Friday that it has 430 employees.

New funding also helps pay for Slack’s recent push into advertising on billboards and television commercials. Slack said it has 2.7 million people using its chat tools daily, 800 000 of whom pay about $8 to $15 per month to use the service.

Bloomberg reported last month that Slack was seeking an investment that would value the company at $3.5bn to $4bn. The financing round was led by Thrive Capital Management LLC, and included GGV Capital and Comcast Ventures LLC. Existing Slack investors, including Accel Partners, Social Capital, Spark Growth and Index Ventures, also kicked money into the round.