Slack heading for a $23 billion valuation, following a quarter of ripper revenue growth

Slack is the latest Silicon Valley tech behemoth to go public, and its upcoming direct listing is expected to value the company at a whopping $23 billion.

According to a Bloomberg report, sources close to the matter, who asked not to be named, said the startup’s projected revenue and current growth rate mean when it goes live its valuation could leap to between $US16 billion and $US17 billion. This equates to more than $23 billion Australian Dollars.

Founded in 2009 by Stewart Butterfield and Cal Henderson, Slack now has more than 10 million users worldwide, and 85,000 paying customers.

The startup filed its prospectus with the SEC in May, stating it would place 117 million shares on the market, through a direct listing.

An unusual alternative to an IPO, by which the company sells directly to the public without intermediaries, the listing is reportedly scheduled for June 20.

Last week, Slack announced its Q1 results for the 2020 fiscal year, reporting a 67% increase in total revenue, year-on-year.

Gross profit totalled $168.5 million, up from $103 million in the same quarter last year.

For the financial year 2020, the tech giant predicts total revenue of up to $870 million, representing about 50% year-on-year growth.

This takes into account approximately $49 million in one-time direct-listing expenses.

If the predicted $23 billion figure is correct, it would more than double Slack’s valuation.

In August last year, the startup raised $617.8 million in Series H funding, bringing overall investment to almost $1.8 billion.

This raise valued Slack at more than $10.3 billion.

At the time, Slack said in a statement it “pursued this additional investment to give us even more resources and flexibility to better serve our customers, evolve our business, and take advantage of the massive opportunity in front of us”.

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