VC Exits
Slack to forgo IPO for direct listing
January 11, 2019
Messaging powerhouse
Slack plans to skip an IPO and instead go public through a direct listing sometime during 2Q, per The Wall Street Journal. If those plans materialize, the move would follow closely in the footsteps of music streaming company
Spotify, which made headlines last April with a direct listing on the NYSE that the Swedish business hoped would become a model for other highly valued consumer startups.
Perhaps the main way a direct listing differs from a traditional IPO is that investment banks don't underwrite the shares on offer, leaving it up to the public markets to determine a company's initial worth. That reliance on the public can also make the path more appealing to companies with strong brand recognition. A direct listing also doesn't raise any immediate money for the company, making it an unpopular route for startups in need of a quick cash infusion.
Slack is working with Goldman Sachs, Morgan Stanley and Allen & Co. on the listing, again per the WSJ, the same group of investment banks that advised Spotify on its debut.
Founded in 2009, Slack has raised more than $1.2 billion in equity financing to date from investors including SoftBank, GGV, DST Global and Kleiner Perkins. The company's valuation has shot up since Slack first achieved unicorn status in 2014, rising to $5.1 billion by 2017 and more than $7.1 billion last August.
That August funding, a $427 million round led by Dragoneer Investment Group and General Atlantic, landed Slack just outside the top 10 on our list of the most valuable VC-backed companies in the US. Here's a look at its full funding history:
The San Francisco-based messaging company has also looked for growth via acquisition. Slack sealed three takeovers last year, bringing its overall acquisition count to five, per the PitchBook Platform. Those 2018 deals included the purchase of email provider Astro and automation specialist Missions, both of whose offerings Slack has incorporated into its own platform.
Perhaps the main way a direct listing differs from a traditional IPO is that investment banks don't underwrite the shares on offer, leaving it up to the public markets to determine a company's initial worth. That reliance on the public can also make the path more appealing to companies with strong brand recognition. A direct listing also doesn't raise any immediate money for the company, making it an unpopular route for startups in need of a quick cash infusion.
Slack is working with Goldman Sachs, Morgan Stanley and Allen & Co. on the listing, again per the WSJ, the same group of investment banks that advised Spotify on its debut.
Founded in 2009, Slack has raised more than $1.2 billion in equity financing to date from investors including SoftBank, GGV, DST Global and Kleiner Perkins. The company's valuation has shot up since Slack first achieved unicorn status in 2014, rising to $5.1 billion by 2017 and more than $7.1 billion last August.
That August funding, a $427 million round led by Dragoneer Investment Group and General Atlantic, landed Slack just outside the top 10 on our list of the most valuable VC-backed companies in the US. Here's a look at its full funding history:
The San Francisco-based messaging company has also looked for growth via acquisition. Slack sealed three takeovers last year, bringing its overall acquisition count to five, per the PitchBook Platform. Those 2018 deals included the purchase of email provider Astro and automation specialist Missions, both of whose offerings Slack has incorporated into its own platform.
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