What You Need to Know about Slack’s IPO

Leave a Comment / Blog, Featured / By Mariah Melendez

On Friday, April 26th the details behind Slack filing its initial public offering (IPO) were released. Many highly anticipated companies like Beyond Meat and Saudi Aramco are also hitting the market, so what is the most important thing to know about Slack?

For Starters

Slack was founded in 2009 and was most recently valued at $7.1 billion as of last August. Slack’s owner Stewart Butterfield (yes, that’s his actual name) had initially set out to build a gaming company called Tiny Speck, when that flopped, Butterfield and his team began developing Slack, which stands for Searchable Log of All Communication and Knowledge.

Show me the Money

The messaging service brought in roughly $221 million in revenue in the year ended January 2018, according to the website The Information, and its top line was projected to grow 78 percent which was roughly $389 million last year. For the current year, the company sees revenue of $640 million, an increase of 64 percent. Basically, Slack was set to finish last year with negative $65 million in free cash flow (FCF) but expects that to turn positive this year with a projected $14 million in FCF. Its balance sheet looks strong with $900 million in cash as of October 2018. Slack’s decision to use a direct listing is a signal that the company is confident in its financial strength and cash position.

key points about Slack’s IPO

Many people use Slack for free. Just because Slack has a lot of users doesn’t necessarily mean that they are paying users. I’m sure for all the people who pay for Slack’s services there are 10 more people who use it for free, this is similar to Dropbox and Spotify’s IPO’s as well.

Amazon spending. Like most companies, Slack uses Amazon Web Service (AWS) for its iCloud infrastructure. They currently spend $50 million a year to use AWS, and they only use AWS centers in the United States which limits its international expansion.

Investors are definitely keeping Slacks IPO on their radar along with its competitors nationally and abroad. Regardless of Slack’s future prospects, they’ve certainly made a name for themselves in the business world. Fortunately, now you may be able to get your hands on a piece of that success.