Investments

Slack Skips IPO; Plans Direct Listing

Slack Skips IPO; Plans Direct Listing

Slack, a popular workplace messaging app, said it has confidentially filed with regulators in the United States to list its shares, according to a report from Bloomberg.

Though it didn’t share details of its plans on Monday (Feb. 4), the company said it was working with Allen & Co., Morgan Stanley and Goldman Sachs Group on the share sale.

Slack will skip the traditional initial public offering (IPO) route and sell its shares through what’s called a direct listing. A direct listing would let current investors sell their shares with a few advantages, including no lock-up period.

The reason for the direct listing is that the company doesn’t need cash or publicity, something an IPO can provide. The sale could happen as soon as this summer. Slack could see a value of as much as $7 billion, although the person who spoke with Bloomberg (on the condition of anonymity) said the company could always change its plans.

A direct listing isn’t unheard of, as Spotify did one and began trading in April. In an IPO, underwriters work out the details of how many shares will be available and for what price, getting their fees from the proceeds. A direct listing, however, lets investors sell directly to new shareholders and price the shares strictly on demand.

Slack said that it has 10 million daily users, and that three million pay for its premium software. The service has been successful, even when pitted against Microsoft’s Teams service. Another chat company, called HipChat, shuttered after owner Atlassian sold HipChat’s assets to Slack.

In other Slack news, 11 new bot-related startups have caught the eye of the company, which decided to invest in them and build out its bot portfolio to maintain its competitive streak. As of that report, Slack had invested in 25 bot startups.

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