Slack gets ready to go public
Image: Slack

Slack, the workplace messenger app that many businesses use to manage their professional communications, is now planning on going public.

The move was revealed late in April, when Slack Technology Inc. filed their intentions with the Securities and Exchange Commission. According to their registration statement, Slack’s stock will be listed as the symbol “SK” on the New York Stock Exchange.

However, Slack going public won’t actually raise any money for the company. Instead, this decision is only enabling shareholders who already have a stake in Slack to begin selling the stock they hold.

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An Overview of Slack

Founded in 2009 by four ex-Flickr team members, Slack offers organizations the convenient ability to create multiple secure communication channels.

This allows companies to share internal information in confidence, while also reaching outward to collaborate with other organizations. This means businesses can come together in open channels they’ve created to share and build cooperative networks of industry information.

Many organizations and remote workers choose Slack for these benefits, but also because Slack offers a version that’s entirely free to use.

Lots of Users, but Few Paying

Slack currently caters to 10 million users daily who come from over 600,000 separate organizations.

But of those 600,000 organizations, only around 88,000 are paying Slack for their services. The rest of the more than 500,000 organizations who rely on Slack are using the software’s free version instead.

So, while Slack’s free version is meant to act as an incentive to get companies to sign-up for their full range of paid services, many companies end up satisfied with just the basic features. But at the same time, it’s also true more users are signing up for Slack’s paid version than ever before.

While 88,000 Slack users are paying now, only 59,000 users spent anything for Slack in January of 2018. Since Slack has been around for a decade now, this demonstrates a notable increase in the rate of paying customers.

This also partly explains why the company has suddenly seen such an increase in its revenue over the past few years.

Slack is Rising in Revenue, but Taking Losses

Slack’s filing to the Securities and Exchange Commission details the company’s annual revenue growth, along with shrinking net losses.

In 2017, Slack’s revenue was $105.2 million. In the two short years between then and 2019, that number shot up to $400.6 million. However, due to what the report calls investments “in growing our business to capitalize on our market opportunity,” the company has been losing money for years.

Slack incurred net losses of $146.9 million in 2017 and has continued spending more funds than earning since.

But overall, it’s important to remember that with Slack’s expanding clientele, things are looking brighter for the company. With their rising revenue growth starting to catch up to operating expenses, Slack’s net losses reduced to $140.1 million in 2018 and continued shrinking down to $138.9 million in 2019.

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