Slack’s investment arm, the Slack Fund, along with traditional venture shops Andreessen Horowitz and Accel, have pledged to invest $80 million into startups that build on its platform.
The fund is large when compared to Slack’s revenues, which crossed the $100 million recurring mark last year. This puts the company in league with other platform-driven funds from already-public companies, including Cisco ($150 million), Amazon ($100 million), IBM ($100 million), and Twilio ($50 million). The investment fund also projects confidence from Slack that its platform ambitions are serious and attainable.
“We view our investments as win-win,” said Brad Armstrong, Slack’s head of business development, in a statement to Crunchbase News. “They provide utility to our customers and help us grow the ecosystem, while allowing us to focus on building the platform itself.”
For remote startups that rely on Slack, the future success of a Slack platform could mean streamlined operations and more effective communication—ensuring Slack’s status as an indispensable team communications app.
To understand what a Slack platform could look like for teams in the future, let’s look towards the bots and apps the popular messaging application has backed so far.
Slack Fund’s Major Investments
Of the 25 investments the Slack Fund has made, twenty are listed in Crunchbase. Cumulatively, the rounds that Slack Fund has participated in publicly total $35 million. The bulk of that disclosed investment appears to have gone to two Slack-based startups: Demisto and Troops.
Demisto, an automated security platform that has its own Slack bot, raised a $20 million Series B from both the Slack Fund and its partner Accel. It is the largest round of investment that the Slack Fund has taken part of, and the timing of the investment is notable. The Series B round was announced nine days after Slack launched Enterprise grid, its bid to attract and retain big business. Well-funded Slack security offerings, such as Demisto’s security bot, could go far in persuading IT departments with sensitive data to adopt Slack for team messaging.
Immediately preceding Slack Fund’s participation in its largest round to date is its second largest, Troops, Inc. Billing itself the “Slackbot for Sales Teams,” Troops raised $7 million dollars from the Slack Fund and other investors and counts payments company Square as one of its customers. For Slack, the Troops investment has less obvious tie-ins to Slack’s core business; however, Troops tight integration with Salesforce gives Slack the veneer of being a fully-functional CRM.
While these companies represent the two largest rounds the Slack Fund has participated in, smaller and earlier rounds are far more typical for the recently-minted fund.
Building a Messaging Platform with Seed Investment
Until recently, small bets were the norm for the Slack Fund. 76 percent of its investments are, according to Crunchbase data, seed stage. And like the eventual results of seed investments, the companies that Slack has invested in are nascent as well.
Begin, Crunchbase’s first documented Slack Fund investment made in December of 2015, is still in beta, and its Twitter account has been inactive since last year. Wade & Wendy, a “personal AI career guide” bot, with three investments from the Slack Fund from December 2015 to July 2016, has found itself in a similar position. Slack Fund members that are on the beta list also include Butter.ai, Myra Labs, and Birdly.
Thankfully, not all of the Slack Fund’s bots are stuck behind beta list gates. Howdy.ai, which has created a team training bot and a bot for managing Slack bots, has stayed quite active since its initial investment in 2015. The company has not taken on additional funding since its seed round. Meanwhile, Statsbot, which reports data from Google Analytics, Mixpanel, and Salesforce into Slack, is one of the most popular bots available from Slack. It is also the number one featured bot under “Brilliant Bots” in the Slack app directory.
The Slack Fund has also shown willingness to invest in startups that play nice with the Slack platform, even if the app or bot does not rely on Slack entirely to function. For instance, Abacus, which develops expense reporting software, lets Slack users install a bot to approve or deny expense reports from within Slack. These tasks can also be completed within Abacus’s cloud offering as well.
And like most funds, there are failures. Awesome.ai, a Slack app that intended to integrate with team email, folded eight months after taking a seed round from the Slack Fund.
For Today, Developers Keep Developing
Regardless of investment, Slack continues to attract developers to its platform. Product Hunt, where new apps in the tech community are often launched and then upvoted on a la Reddit, has had 35 Slack apps or bots submitted in the past thirty days. Microsoft Teams, in comparison, has only had one bot submission in total.
But given the current competitive landscape, Slack’s future growth isn’t definite, even if its short-term momentum remains staggering. Slack faces stiff competition from Microsoft and Google, both of which have established platforms and large enterprise sales teams to fall back on. Microsoft has also launched its own bot framework, directly targeting Slack’s platform ambitions. And as Twitter has learned the hard way, staying in the good graces of developers is never guaranteed.
It’s too early to draw hard conclusions from the investments the Slack Fund has made and what impact it has on Slack’s broader goals. But the fund’s active investment pace, and its participation in some bigger bets, does demonstrate Slack’s willingness to become the default messaging platform for startups and large businesses. Whether or not an army of venture-funded bots will play a significant role in ensuring that this will happen remains to be seen.