Slack Raises $427M Series H Pushing Its Valuation Over $7.1B

This morning Slack announced that it has closed a $427 million Series H. The new capital values the firm at over $7.1 billion. Per the company, Dragoneer and General Atlantic led the round.

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Slack raised $841 million previously, making the new round worth about half its prior raises combined.

Slack’s Series H is not a surprise. The round (including its rough size and value) leaked earlier this month in TechCrunch. The new capital comes around a year after Slack raised a $250 million round. At the time, that quarter-billion dollar investment was its largest.

Now, the firm is even better capitalized.

Regarding the new round, and the new valuation, it’s worth reiterating a few points:

• Slack faces material competition from two technology mega-giants: Microsoft via Yammer and Teams, and Alibaba via DingTalk. Facebook is working in the space as well, but with seemingly little impact. That sort of competition (not to mention smaller players) demands deep pockets. Slack is rich but not as rich as three of the wealthiest companies in technology history. So, if Slack can get its hands on fresh capital at a high valuation, it may be able to survive a Startup Winter while still investing in growth.
• Slack’s new valuation isn’t that bonkers, given its growth. We did some mathmagic the other week, and our guess is that Slack is now valued at around a 20x ARR multiple. That multiple comes down a bit each week as Slack accretes more recurring revenue. The company is richly-valued, but not terrifyingly so, given its history of record-setting ARR growth.

There is a new theme in Silicon Valley, peeping out from the sidelines. It’s called raise lots now while you can, and this isn’t the last time we will see something akin to this round play out.

Top Image Credit: Li-Anne Dias