Slack Technologies, formerly Tiny Speck, was founded in March 2010 by Stewart Butterfield as a video game development company. Due to an inability to attract enough attention, the company shut down its flagship game, Glitch. During its time as Tiny Speck, the company created an internal communications module that would later become the foundation for what is now the Slack product. Shortly after Glitch shut down at the end of 2012, the remaining team dedicated their time to building out the communication platform they had, eventually rolling out the beta version of the app in August 2013. In August 2014, the company officially changed its name to Slack Technologies, shortly after the public rollout of Slack, the workplace messaging and collaboration platform. Since then, Slack has experienced tremendous growth, claiming over 600,000 organization-level customers representing over 10 million daily active users as of May 2019. Revenues have also grown rapidly, totaling over $400 million for fiscal year 2019, up from $105 million two years prior.
As a private company, Slack has raised over $1.3 billion in primary funding from investors including SoftBank Group, Accel Partners, Andreessen Horowitz, and Kleiner Perkins. In fact, Slack will be SoftBank’s Vision Fund’s first enterprise software company exit. The company’s growth has been largely attributable to both successful deployment of the “freemium” business model and a first mover advantage, creating a product that focuses on customer experience while solving a number of inefficiencies in traditional business communication mediums. To supplement its organic growth, the company has completed a number of tuck-in acquisitions throughout its operating history. Most recently Slack Technologies acquired Hipchat and Stride, two competing products that was owned and operated by Atlassian.
In its regulatory filings with the SEC, Slack estimates its addressable market at $28 billion. This figure suggests the company has captured slightly above 1 percent of its addressable market. Further, we believe the company’s actual addressable market could be larger due to the the broad number of services embedded in its platform. For example, the platform includes video conferencing, voice communication, and file sharing capabilities, all in addition to the direct chat communication and channel-communication functions. Each of the aforementioned functions have markets with a range of specialized suppliers. Additionally, it is important to consider the potential disruption to e-mail and other traditional business communication markets. As of October 2017, Gartner estimated Slack to have a 70 percent market share of the newly forming WSC market.
This report is distributed by SharesPost Financial Corporation, a member of FINRA/SIPC. SharesPost Research LLC, SharesPost Financial Corporation, and SP Investments Management, LLC, an investment adviser registered with the Securities and Exchange Commission, are wholly owned subsidiaries of SharesPost, Inc.
Recipients who are not market professionals or clients of SharesPost Financial Corporation should seek the advice of their own financial advisors before making any investment decisions. None of the information contained in this report represents an offer to buy or sell, or a solicitation of an offer to buy or sell, any security, and no buy or sell recommendation should be implied, nor shall there be any sale of these securities in any state or governmental jurisdiction in which said offer, solicitation, or sale would be unlawful under the securities laws of any such jurisdiction.
This report does not constitute an offer to provide investment advice or service. Registered representatives of SharesPost Financial Corporation do not (1) advise any member on the merits or prudence of a particular investment or transaction, or (2) assist in the determination of fair value of any security or investment, or (3) provide legal, tax, or transactional advisory services.
The analyst(s) certifies that the views expressed in this report accurately reflect the personal views of such analyst(s) about the subject matter therein, including all of the subject securities or issuers, and that no part of such analyst compensation was, is, or will be during their employ directly or indirectly related to their specific views contained in this report.
Analyst compensation is indirectly based upon the growth and success of SharesPost, Inc., including the overall performance of its subsidiaries, the individualized performance of any such analyst, and the development and progression of the overall research effort. SharesPost, Inc. earns revenue from, among other avenues, brokerage sales, and therefore the analyst may indirectly benefit from research reports that have the ultimate effect of increasing trading activity, either through SharesPost Financial Corporation and/or with SharesPost Investment Management, LLC.
This report does not contain a complete analysis of every material fact regarding any issuer, industry, transaction, or security. The opinions expressed in this report reflect the judgment of the analyst at a specific point in time and are subject to change. The information contained in this report has been obtained from sources the analysts consider to be reliable; however, there is no guarantee the any of the information is accurate.
Securities referenced in this report may be offered by SharesPost Financial Corporation, member FINRA/SIPC. SharesPost Financial Corporation and SP Investments Management are wholly owned subsidiaries of SharesPost, Inc. Certain affiliates of these entities may act as principals in such transactions.
Investing in private company securities is not suitable for all investors. An investment in private company securities is highly speculative, involving a high degree of risk, and investors should be prepared to withstand a total loss of your investment. Private company securities are also highly illiquid and there is no guarantee that a market will develop for such securities. Each investment also carries its own specific risks and investors should conduct their own, independent due diligence regarding the investment, including obtaining additional information about the company, opinions, financial projections and legal or investment advice.
Copyright SharesPost, Inc. 2019. All rights reserved.
Copyright SharesPost, Inc. 2019. All rights reserved.