Tiny Speck

Slack Technologies, LLC is an American software company founded in 2009 in Vancouver, British Columbia, known for its proprietary communication platform Slack.

Outside its headquarters in San Francisco, California, Slack operates offices in Dublin, Vancouver, New York City, Toronto, Denver, London, Tokyo, Pune, Paris, and Melbourne.

In June 2019, Slack Technologies went public on the New York Stock Exchange via a direct stock listing. On December 1, 2020, Salesforce announced its acquisition of Slack for $27.7 billion. On July 21, 2021, the acquisition was closed.

History

Initial funding and ''Glitch''

The company goes back to the San Francisco based startup Tiny Speck, which was headed by Stewart Butterfield, the co-founder of the photo sharing site Flickr. Tiny Speck received angel funding of $1.5 million in 2009, followed by Series A funding of $5 million in 2010 from Accel and Andreessen Horowitz. A Series B round of $10.7 million was raised in 2011.

Tiny Speck's first product was a computer game called ''Glitch''—a social MMORPG with highly stylized 2D graphics. The gameplay was described as follows: "players must learn how to find and grow resources, identify and build community and, at the higher levels of the game, proselytize to those around them". ''Glitch'' launched on September 27, 2011, but subsequently "unlaunched" to improve gameplay.

In November 2012, it was announced that ''Glitch'' would be closed, effective December 9, 2012.

''Slack'' and further funding

After the closure of ''Glitch'', the company launched the Slack real-time collaboration app and platform, raising $17 million in funding from Andreessen Horowitz, Accel, and Social Capital. After the launch of Slack, the company renamed itself to Slack Technologies in August 2014. The name is an acronym for "Searchable Log of All Conversation and Knowledge". Slack had been an internal tool used for the development of ''Glitch''.

The company raised $42.75 million in April 2014. In October 2014, the company raised $120 million in venture capital with a $1.2 billion valuation led by Kleiner Perkins and GV. Earlier investors Andreessen Horowitz, Accel, and Social Capital also participated in this round.

In January 2015, Slack announced the acquisition of Screenhero, a specialist in voice, video, and screen sharing. In March 2015, Slack signed a deal with investors to raise up to $160 million in a funding round that valued the company at $2.76 billion. New investors include Institutional Venture Partners, Horizons Ventures, Index Ventures, and DST Global.

In April 2015, the company raised another $160 million. In May 2015, Social Capital was a leading investor in a funding round for Slack Technologies.

In April 2016, Slack raised another $200 million, led by Thrive Capital, with participation by GGV, Comcast Ventures and existing investors, including Accel, Index Ventures, and Social Capital. In 2016, Slack was ranked #1 on the ''Forbes'' Cloud 100 list. In September 2017, Slack raised $250 million, the majority of which came from Softbank Vision Fund, with about 45% of that, or $112.5 million, originally from the Public Investment Fund of Saudi Arabia. This round put Slack's total fundraising at $841 million and its valuation at $5.1 billion (including cash raised). In early 2018, Slack announced the company's first CFO, Allen Shim.

On July 26, 2018, Atlassian announced the shutdown of its competing HipChat and Stride effective February 11, 2019, and the sale of their intellectual property to Slack. Slack was to pay an undisclosed amount over three years to assume the user bases of the services, and Atlassian was to take a minority investment in Slack. The companies also announced a commitment to work on integration of Slack with Atlassian services.

In September 2018, it was announced the firm was preparing for an initial public offering in the first half of 2019. In November 2018, Slack was recognized in Credit Suisse AG's inaugural Disruptive Technology Recognition (DTR) Program, an annual recognition of five top companies who are disrupting traditional enterprise information technology. On January 16, 2019, Slack announced the launch of the company's new logo.

On December 11, 2018, it was reported that Slack was considering a direct public listing. In the lead-up to its DPO, Slack reported that it had generated $400.6 million in revenue for the fiscal year ending January 31, 2019, up from $220.5 million in the previous year and up from $105.2 million in 2017. Slack also reported losses of $138.9 million for the fiscal year ending in January 2019. On February 4, 2019, several media news outlets reported that Slack had filed for taking the company public. According to ''The Wall Street Journal'', sources indicated the company would pursue a Direct Listing Process (DLP) instead of the traditional IPO. On April 26, 2019, Slack filed its Form S-1 to go public through a direct listing on the New York Stock Exchange, similar to Spotify in 2018. Its stock, ticker WORK, started trading on June 20, 2019. The NYSE set a reference price of $26 to start off trading and the stock rose to more than $41 in the initial hours of trading. It was delisted in June 2021 after Salesforce completed is acquisition, and shareholders were given Salesforce stock.

On November 13, 2019, Slack announced the formation of its partner channel as part of its focus on enterprise clients.

On February 10, 2020, it was reported that IBM will deploy Slack to all of its 350,000 employees, making IBM Slack's largest client to date.

On November 25, 2020, the ''Wall Street Journal'' reported that Salesforce was in advanced talks to acquire Slack. The company announced its planned acquisition of Slack on December 1, 2020, for over $27 billion in cash and stock.

Litigation

In July 2020, Slack filed a lawsuit with the European Commission accusing Microsoft of anticompetitive behavior. Slack alleges that Microsoft illegally bundled their competing Microsoft Teams collaboration product with the Microsoft office suite.

In October 2020, investors plaintiffs filed a class action lawsuit against Slack in the California State Superior Court of San Mateo County, alleging securities violations. Plaintiffs claimed, on behalf of individuals who acquired Slack Class A common stock in Slack’s June 2019 direct public offering, that Slack violated Sections 11, 12, and 15 of the Securities Act of 1933 because its IPO documentation allegedly had untrue statements and material omissions. Earlier, in April 2020, Judge Susan Illston of the United States District Court for the Northern District of California had issued an order partially granting Slack’s motion to dismiss a similar federal class action complaint against it. On the one hand, while typically, plaintiffs must show they can trace their shares of stock in the issuer back to the relevant offering, however, if there are multiple registration statements, plaintiffs must prove that the shares they purchased were issued under the allegedly false or misleading registration statement, Illiston held that a direct listing is different and requires a broader reading of Section 11 of the '33 Act of the phrase “such security,” meaning: “acquiring a security of the same nature as that issued pursuant to the registration statement.” As a result, she denied defendant’s motion to dismiss the case under Section 11. On the other hand, she granted the motion to dismiss partially - as to claims that Slack misled plaintiffs regarding Slack's scalable architecture, and she also found the statements in the “Key Benefits” portion of Slack's registration statement to be unactionable.

References

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Canadian companies established in 2009
2009 establishments in British Columbia
Business software companies
Companies based in San Francisco
Companies based in Vancouver
Companies formerly listed on the New York Stock Exchange
Direct stock offerings
Software companies based in the San Francisco Bay Area
Software companies established in 2009
Software companies of Canada
Software companies of the United States
2021 mergers and acquisitions
American corporate subsidiaries
Salesforce
2020 mergers and acquisitions