Slack, an Office Messaging Platform, Continues to Grow
Communication with coworkers has evolved tremendously. If you work in an office, you’re probably familiar with the messaging platform Slack.
Slack has only been around for a few years, but a lot of businesses and offices have started to adopt the messaging platform.
Our office is one of them. Two years ago, we incorporated Slack’s platform into our workplace. Before that everyone was communicating in a lot of different ways — Google Hangouts, Yahoo Messenger, emails, and whatever else people were using. It was hard keeping track of how to communicate with certain coworkers. Some people didn’t reply back to their emails and preferred talking through a chat platform. Others preferred the opposite.
A lot got lost in translation. And if you’re familiar with office work, then you know miscommunications can be extremely detrimental to your own work and the business as a whole.
Not to mention, it’s easier to talk to certain coworkers through messages rather than in person because it’s easier to ignore a message than leave a conversation that’s happening in real life.
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Slack is Growing Bigger and Bigger
As of May 2018, Slack has grown its daily active users by 33% to 8 million since September 2017. In addition to that, the company has grown its paid users to 3 million, up 50% from September 2017.
Slack’s platform allows for an integrated way to communicate and get work done with the rest of your office. There are a variety of apps you can download and use on Slack’s platform to make it easier to do the tasks you need to get done and share documents easily and more efficiently.
In May 2018, Slack also announced that it has 70,000 paid teams. User growth is essential to companies like Slack. The company’s ability to grow its paid subscribers is going to be top priority, and for potential investors, that’ll be a huge factor in if they invest or not.
A robust growth of Slack’s paid users will ensure to potential investors that the company is focused on that aspect and that it’s fully capable of still existing as company in the years to come.
Slack’s business model works similar to Dropbox and Spotify, both companies that have IPO’d this year. It’s known as the freemium model, in which its end goal is to get paid users by getting them attracted with the free product. Once users try the free product and get familiar with it, it’ll be easier for them to take the next offer and pay what seems like a reasonable subscription for other products.
The company will be entering a market that has some strong competition. This March, Microsoft announced that its Teams product is being used by 200,000 organizations after a little over a year of being on the market. Microsoft is known for its product bundles. Microsoft bundles Teams with its Office 365 cloud productivity suite for businesses, which could seem more attractive to some business owners. Instead of paying for one product, they’ll get other products that’ll be useful to their business.
Slack is also competing with Alphabet’s Google Hangouts, Cisco Systems Webex Teams, and Workplace by Facebook.
As of right now, Slack is a private company, but that could all change in 2019. The company has been rumored to be preparing for the next necessary step: its initial public offering (IPO).
What Could We Expect from a Slack IPO?
According to the Wall Street Journal, Slack Technologies Inc. is seeking to go public as soon as the first quarter of 2019. This comes at time when the company just raised $427 million in private funding, led by Dragoneer Investment Group and General Atlantic earlier this year.
While 2018 would have been a great year for Slack to go public, the company felt like it would be rushing to its market debut, which could have some undesirable consequences.
An IPO could bring Slack to a $7 billion valuation. The company could use the money it earns from its IPO to help improve and expand its platform’s tools and improve its global presence. Slack could also use the time until next year to build on its existing tools to prove its worth for investors.
This past July, Slack acquired the IP for Atlassian’s workplace chat tools HipChat and Stride. This was a great move for the company, as it was able to migrate customers from those platforms onto Slack. Not IPO-ing until 2019 could give Slack time to make similar business decisions that will expand and grow its already blossoming user base, both paid and unpaid.
It’s still too soon to map out the specific IPO details for Slack, but now it’s on our radar. An IPO from Slack in early 2019 could lay the groundwork for another successful IPO market in 2019. 2018 has been a standout year for IPOs, and another standout year could very well be around the corner.
If Slack’s IPO and the IPO market in general interests you, I suggest watching the presentation my colleague Jason Stutman put together. Companies like Slack could be on the path to becoming the “next Apple” or “next Amazon,” and you could be the first to know about that potential!
Learning about upcoming IPOs gives you an advantage over other investors. You’ll know about these companies before they go public and learn more about the strength they’ll have as newly publicly traded companies.
After all, early investors in Apple, Microsoft, and Amazon have generated gains of 1,000%, 2,500%, 5,000%, and more. You have the opportunity to become one of those early investors…