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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Slack made a surprise announcement today that it’s acquired HipChat, once a primary competitor to its workplace chat service, from enterprise software giant Atlassian. As part of the partnership between Slack and Atlassian, HipChat will be shutting down and the two companies will work together to migrate all of its users over to Slack. The same goes for Stride, the chat and collaboration successor to HipChat that Atlassian launched last year. Atlassian clarified that Slack is only buying the intellectual property behind the two products, and that the two companies will be working on future integrations together.
Slack is buying, and shutting down, HipChat and Stride
HipChat, the workplace chat app that held the throne before Slack was Slack, is being discontinued. Also being discontinued is Atlassian's own would-be HipChat replacement, Stride.
News of the discontinuation comes first not from Atlassian, but instead from a somewhat surprising source: Slack CEO Stewart Butterfield. In a series of tweets, Butterfield says that Slack is purchasing the IP for both products to "better support those users who choose to migrate" to its platform.
Butterfield also notes that Atlassian will be making a "small but symbolically important investment" in Slack — likely a good move, given that rumors of a Slack IPO have been swirling (though Butterfield says it won't happen this year). Getting a pre-IPO investment into Slack might end up paying off for Atlassian better than trying to continue competing.
Slack announcement. Also at Bloomberg, Android Police, and Wired.
Related: Why I Hate Slack and You Should Too
Slack Valued at Over $5 Billion
(Score: 4, Insightful) by kazzie on Tuesday September 19 2017, @08:42AM (6 children)
I value Slackware far above Slack.
(Score: 2) by fishybell on Tuesday September 19 2017, @03:50PM (4 children)
I'll be honest, I thought we were talking about Slackware.
Seriously though, TFA and TFS don't explain. What is Slack? What do they do? What do they produce? What do they sell, and to whom?
(Score: 5, Insightful) by MadTinfoilHatter on Tuesday September 19 2017, @04:32PM (3 children)
IRC reinvented by hipsters.
Sell their reinvented proprietary IRC.
Hot air, mostly.
Their reinvented IRC service to suckers and other hipsters.
(Score: 0) by Anonymous Coward on Tuesday September 19 2017, @05:08PM (1 child)
Slack has quite a few nice features that have been packaged into an easy to use platform. I dislike them simply because I think the SaaS model is bullshit for 90% of the things out there. Slack is also a massive MASSIVE cpu hog. I had to boot up an older laptop, still had 4gb of memory and a decent CPU but I could mentally count the time it took for a message to be sent.
(Score: 4, Informative) by arslan on Wednesday September 20 2017, @01:50AM
There an opensource clone called mattermost for in-prem usage. Its pretty good in terms of the core features that Slack has. But yea... billions of valuation for an online chat is ridiculous.
(Score: 2) by JoeMerchant on Tuesday September 19 2017, @08:58PM
When they get a $5.1B market capitalization public placement, it's no longer hot air. It may be marketed to suckers and hipsters, but so is Starbucks and Apple, and they're real enough.
🌻🌻 [google.com]
(Score: 2) by JoeMerchant on Tuesday September 19 2017, @08:52PM
If you value Slackware so much, you might consider supporting AlienBob since he got laid off from his day job.
🌻🌻 [google.com]
(Score: 3, Insightful) by Wootery on Tuesday September 19 2017, @08:44AM (7 children)
The ultimate demonstration that a good implementation is more important than a good business idea.
Or, at least, that you can make good money making a solid implementation of an idea that goes back decades. Even UI wise, it's not far from MSN Messenger, which seemed pretty neat back in 1999.
(Score: 2) by stormwyrm on Tuesday September 19 2017, @10:19AM (5 children)
Very true. Look at where doing that got Apple. The idea of the modern smartphone goes back to the nineties with Palm and Microsoft but it was Apple that made the first real solid implementation that got the concept mostly right. Does Slack's UI design at least have something close to the level of improvement from a late 1990s Windows CE phone vs. the first iPhone? Your comment seems to indicate that the answer is no.
Numquam ponenda est pluralitas sine necessitate.
(Score: 3, Informative) by Wootery on Tuesday September 19 2017, @11:52AM (3 children)
It's essentially [wordpress.com] the same [imfiles.com], unless we count it as a major UI development to combine the windows into one.
Slack has good persistence (it remembers conversations, but with limitations) and good support for 'channels' (group conversations), but at heart it's awfully similar to MSN Messenger.
(Score: 2, Interesting) by WillR on Tuesday September 19 2017, @01:14PM
(Score: 3, Informative) by Pino P on Tuesday September 19 2017, @02:41PM
That looks like Discord, except Discord lets the user switch among multiple communities through icons in the left column [wordpress.com]. And Discord isn't paywalled.
(Score: 2) by JoeMerchant on Tuesday September 19 2017, @09:43PM
Good Marketing > Good Implementation > Good Idea
🌻🌻 [google.com]
(Score: 0) by Anonymous Coward on Tuesday September 19 2017, @03:42PM
Bad brain! Bad!
(Score: 0) by Anonymous Coward on Tuesday September 19 2017, @05:09PM
More like the ultimate demonstration that good marketing is more important than a good implementation or a good business idea. As another comment said, look where that got Apple,
(Score: 1, Funny) by Anonymous Coward on Tuesday September 19 2017, @08:45AM (4 children)
So if I slack off, I get $5 billion? ;-)
(Score: 2) by acid andy on Tuesday September 19 2017, @01:27PM (2 children)
Yep. Imagine how much money they could've made if they'd run a tight operation instead.
If a cat has kittens, does a rat have rittens, a bat bittens and a mat mittens?
(Score: 2) by JoeMerchant on Tuesday September 19 2017, @09:46PM (1 child)
Sad to say, but this same service named something more "businesslike" like, say, "MSN messenger" or something, probably would never have gotten much market traction or adoption at all.
🌻🌻 [google.com]
(Score: 2) by acid andy on Tuesday September 19 2017, @09:58PM
Oh, you mean like "HipChat", right? :D
My post was meant to be a lame joke referencing "tight" versus "slack" but I think it mostly failed.
Come to think of it, that other one sounds like some kind of raunchy dating app! Let your hips do the talking baby!
If a cat has kittens, does a rat have rittens, a bat bittens and a mat mittens?
(Score: 2) by c0lo on Tuesday September 19 2017, @03:17PM
Nope. You'll need to slack on.
https://www.youtube.com/watch?v=aoFiw2jMy-0 https://soylentnews.org/~MichaelDavidCrawford
(Score: 5, Insightful) by stormwyrm on Tuesday September 19 2017, @09:01AM (23 children)
How irritating, it took some digging to figure out WTF Slack [wikipedia.org] is supposed to be. The Reuters article that's the main source doesn't explain what it is nor does it even link to the website [slack.com]! Neither does the Bloomberg article explain what it is. TechCrunch is little better, referring it briefly as a 'workplace collaboration tool'. Evidently it seems to be some sort of instant messaging groupware. Why such a thing would be valued at $5 billion though, is the question I think we ought to be asking.
Numquam ponenda est pluralitas sine necessitate.
(Score: 5, Informative) by canopic jug on Tuesday September 19 2017, @09:41AM (8 children)
It's mostly a solution in search of a problem. As others have already noted this is just another VC bubble. It's from a company that's done little but marketing and hype. What they have is this:
Chat software is like having a perpetual meeting. It completely zaps concentration and productivity until you turn it off. With it off, since it claims that its strength is synchronous communication, there is no point in having it. Stick with e-mail and a real mail client with proper filtering and sorting to get any work done. No, M$ Outlook does not fall into that category, especially since it is tied to M$ Exchange [blogspot.com].
If there is a percieved need for sychronous chat, then there is always the original: IRC.
Money is not free speech. Elections should not be auctions.
(Score: 3, Funny) by LoRdTAW on Tuesday September 19 2017, @12:34PM
How else are decentralized web devs supposed to do pair programming?
(Score: 4, Insightful) by zocalo on Tuesday September 19 2017, @12:59PM (6 children)
Frankly, I think a lot of it is just down to the mindset that newer must be better which tends to be stronger when you are younger and like to be seen as on the cutting edge of things. It's a phase most of us go through from teens-to-whenever, and it tends to pass in favour of whatever lets you get a given task done with the least resistance, regardless of how "hip" it is. Some things gain enough traction to carry on lumbering along (Facebook, maybe), others whither on the vine (MySpace), but if your primary userbase is the current generation of hipsters, then I'd be paying a LOT of attention to whether or not the next "generation" (e.g. those 5 years or so younger) is adopting your product, because if they're not it's almost certainly time to strap on that golden parachute and pull the cord.
UNIX? They're not even circumcised! Savages!
(Score: 2) by Pino P on Tuesday September 19 2017, @02:44PM
And scrolling back to what was said earlier while you were gone without everybody having to lease a server to run his own ZNC.
(Score: 2) by cubancigar11 on Tuesday September 19 2017, @03:07PM
ChatZilla?
(Score: 0) by Anonymous Coward on Tuesday September 19 2017, @03:11PM (3 children)
What does Slack have that XMPP/Jabber doesn't have, and what can we do to implement it for the open source/fuck VC ecosystem?
(Score: 1, Funny) by Anonymous Coward on Tuesday September 19 2017, @03:29PM
Hype and buzzwords.
(Score: 0) by Anonymous Coward on Tuesday September 19 2017, @05:13PM
Slack has nothing really special about it.
What can be done? Make an open / free version that is dead simple to set up on a server so that companies can run their own infrastructure. There is just this magical FAITH people have that these SaaS businesses will not sell their data or spy on them. Shit, want to do corporate espionage? Work for slack!
(Score: 0) by Anonymous Coward on Tuesday September 19 2017, @08:15PM
None of the FOSS(preferably agpl) xmpp web GUIs that i've seen really got good enough or gained enough traction. I would like to find one though.
(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.
(Score: 3, Interesting) by VLM on Tuesday September 19 2017, @12:15PM (2 children)
A lot of clojure people hang out on one of the channels which is kinda donated for free, so I've used it, some.
Its secret sauce appears to be one-click integration. I could replace any of it, for open stuff anyway, with a very small Perl script, but with Slack its one click and it works.
Also the desktop and mobile UI is pretty nice and consistent.
Its slightly warmed over IRC with centralized servers and support, really. You could almost call it an IRC hosting company.
(Score: 1) by pdfernhout on Wednesday September 20 2017, @03:37AM (1 child)
By me: http://www.pdfernhout.net/reasons-not-to-use-slack-for-free-software-development.html [pdfernhout.net]
What if the Clojure community tried MatterMost or Matrix.org?
The biggest challenge of the 21st century: the irony of technologies of abundance used by scarcity-minded people.
(Score: 2) by VLM on Wednesday September 20 2017, @12:35PM
I'm sure it would work, but its the dreaded network effect where ten guys go on slack and you can guess where the eleventh and following go.
(Score: 3, Insightful) by Anonymous Coward on Tuesday September 19 2017, @06:06PM (5 children)
If anything, this would the nice thing about wealth inequality.
There are an increasingly large number of people with absurdly massive amounts of money, and no real clue what to do with it. They all want to make sure they invest a gazillion dollars in the next Facebook or other 'big thing' and so are quick to voluntarily throw a few bucks at any idea that looks even remotely promising. Of course throw some change translates to millions of dollars for corporations and individuals whose disposable income is measured in billions of dollars.
On the other hand this is obviously completely butchering any correlation between merit and reward in the market. It's all about getting investors hyped, getting them to throw billions of dollars at something, going public, and cashing out. Our world is like a giant candy store for charismatic sociopaths.
(Score: 3, Interesting) by Virindi on Wednesday September 20 2017, @01:13AM (4 children)
Actually, all they seem to care about is slick marketing. As a result, we are being driven ever faster to a society of slick marketing and no substance.
(Score: 0) by Anonymous Coward on Friday September 22 2017, @12:40AM (2 children)
(Score: 2) by martyb on Friday September 22 2017, @12:43AM (1 child)
Wit is intellect, dancing.
(Score: 2) by martyb on Friday September 22 2017, @12:43AM
Wit is intellect, dancing.
(Score: 2) by martyb on Friday September 22 2017, @12:46AM
Wit is intellect, dancing.
(Score: 2) by JoeMerchant on Tuesday September 19 2017, @09:48PM
If you have to ask "what is Slack?"
A) you're not hip enough to matter to the author or the publication
B) you won't care when you find out
C) all of the above
?
🌻🌻 [google.com]
(Score: 4, Insightful) by Virindi on Tuesday September 19 2017, @09:01AM
"VC bubble"!
(Score: 5, Funny) by FakeBeldin on Tuesday September 19 2017, @09:35AM (2 children)
How I initially read the headline:
:)
(Score: 0) by Anonymous Coward on Tuesday September 19 2017, @05:55PM (1 child)
Apparently the dyslexic brain is not actually a disorder but an evolutionary leap. Such brains are more connected to the inter-dimensional space time continuum and thus are able to tap into the "true" reality. It is sad for these people, they are like the Oracles of old. They see the truth but have a hard time convincing people that this reality has gone off the rails.
(Score: 2) by JoeMerchant on Tuesday September 19 2017, @09:50PM
Reality (as perceived by Earth based living organisms) has been off the rails since the first plankton bloom.
🌻🌻 [google.com]