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Software startup Slack Technologies Inc said it raised $250 million from SoftBank Group Corp and other investors in its latest funding round, boosting the company's valuation to $5.1 billion.
The latest fund-raising, led by SoftBank through its giant Vision Fund and joined by Accel and other investors, lifted Slack's total funds raised to $841 million, the enterprise messaging operator said in an emailed statement.
The fund provides resources which will help Slack to run as a cash-generating company and the raise will reduce its dependence on outside financing, Slack Chief Executive Stewart Butterfield said.
Also at TechCrunch and Bloomberg.
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(Score: 5, Interesting) by ledow on Tuesday September 19 2017, @11:13AM (3 children)
Yup, I thought the same.
But it's simply not worth that amount of money. Never believe an investment figure like that. It's what the previous INVESTORS say it's worth. Why would they do that? To encourage more investment, spread the risk, cash out and leave someone else holding the hot potato. This is basically: "This second-hand car, mate? Well it's worth at least twenty grand, isn't it? Only one careful owner, and she was a nun who only drove on a Sunday"
It has 2.7m users. to be worth $5bn each user would have to have paid / be guaranteed to pay: $2000.
Absolute top-tier payment is £11.70 billed monthly (sorry, it gives it to me in GBP): $15.80 per month.
Thus EVERY SINGLE ONE of their 2.7m claimed users would have to be subscribed for over 10 years at the top rate to make that amount of money even COME IN to the company, let alone provide services and assets to that value. That's quite obviously not true as their free tier almost certainly makes up the vast, vast majority of those users, if indeed 2.7m of them are actually active at all.
It's a con. It's a bubble. It's to make people think "Oh, that's worth a lot" with almost ZERO basis for that number in fact (income, profit, etc.). In 2016 their revenue (income before expenses) was $64m. They would have to have ZERO outgoings and earn that for 78 years guaranteed before their valuation ever reflected that kind of revenue.
It's a game of "who gets left holding the hot potato". That guy loses VAST sums of money, as does the company, its employees, suppliers and customers when it all tanks. Everyone else who merely passed it on will make profit based on the snake-oil of telling people it's worth a lot more than they can ever prove "in potentia".
It's an old game, and people still fall for it. Be prepared for Slack to not even exist in ten years time, let alone 78.
(Score: 2) by ledow on Tuesday September 19 2017, @11:16AM
P.S. $64m means that in 2016, it had ~300k active paying users. Nowhere close to 2.7m.
(Score: 3, Interesting) by VLM on Tuesday September 19 2017, @12:26PM (1 child)
There are at least two other revenue sources
One is, being centralized IRC, selling the conversation data to corporations and governments. I've worked for telcos that ran a miniscule profit off government monitoring, we were allowed to bill at standard and reasonable consulting rates etc. Its not necessarily tremendously useful but with a paranoid police state they gotta have eyes everywhere, so they made a place that needs eyes and they can bill for it. As for corporate info aside from outright data dumps which are probably illegal, they could sell something probably legal similar to google's ngram viewer... say you're selling XYZ field products to software devs, how much would you pay for a graph of how often the dev community mentions XYZ vs time, perhaps?
The other revenue idea is the traditional American form a monopoly and then F over the population. So if 432 million smart phones were sold last year and they all paid a "slack tax" of $1 to have slack preinstalled, then in a feverish VC dream that would work out pretty well. Or god forbid if slack became popular enough that it became "corporate mandatory" they most certainly could charge $100/yr for every employee of a company (not just devs with free accts) in a site license, perhaps. If google has 72 thousand employees that very theoretical site license would be $7.2M/yr, times every company out there. The problem of course is slack has a compelling feature set and intense network effect, but its not "THAT" great.
(Score: 3, Insightful) by Pino P on Tuesday September 19 2017, @02:48PM
Slack's ability to increase the price for its service is limited by the threat of "Screw it; we're switching to Discord." That's why, for example, the FamiTracker user community [famitracker.org] and the Cyanide & Happiness fan community [wikia.com] have settled on Discord.