As Slack prepares to go public it does so under circumstances of reporting a net loss of $138.9 million (despite securing revenue to $400.6 million), for the fiscal year ending on January 31, 2019. The loss reported for the same period last year (2018), was similar at 140.1 million although this was on reported revenue of $220.5 million. According to TechCrunch, Slack is linking these losses to its decision “to invest in growing our business to capitalize on our market opportunity,” and notes that they’re shrinking as a percentage of revenue.
According to the S-1 filing placed by the company, it is setting out to make $100 million worth of shares available through its public flotation.
Slack
Slack is a collaboration hub, hosted in a cloud, where users and teams can work together on projects, such as new products or to draw up budgets. Slack was founded by Stewart Butterfield, launching in 2013.
Alternate funding model
In terms of how Slack will make the transition to a public company, The Wall Street Journal reports, based on sources close to the company, that Slack will pursue a Direct Listing Process (DLP) instead of the traditional IPO. This was the same approach adopted by Spotify in 2018.
This means Slack Technologies Inc. is not selling its shares on the stock market. Instead, by undertaking a “direct listing”, this will take the form of a series of transactions from existing shareholders (such as company employees and investors) selling shares to stock market investors. This is an unusual process and regarded by some in the finance sector as “risky.”
2019 outlook
As well as Slack’s forthcoming public offering, the unicorns will be transitioning in 2019, including Uber, Lyft and Airbnb. Perhaps the most anticipated is Uber, which is seeking to raise over $10 billion. This would make the company worth $90 billion, double the valuation of Ford.
