Workplace messaging app Slack has been valued at $5.1 billion, following its latest fundraising round which drew $250 million from SoftBank Group’s Vision Fund.
The investment comes as the weight of cash in private markets continues to push up the valuations of the fastest-growing tech companies, and this latest round of funding gives the startup more ammunition for expansion in an increasingly competitive market for workplace messaging services.
Abu Dhabi’s Mubadala and Saudi Arabia’s Public Investment Fund have invested in SoftBank funds. The company said on Monday that its Vision Fund led a Series G funding round alongside Accel and other investors, topping up Slack’s existing $540 million in funding to $790 million.
The financing round values the startup at $5.1 billion, up from $3.8 billion the last time.
Slack’s chief executive officer Stewart Butterfield said in an interview in London on Monday that he was approached by Deep Nishar, managing director of investments at SoftBank, “about 4 or 5 months ago.”
San Francisco-based Slack said the money is for “operational flexibility,” not for a particular use, and added that it still has much of the $591 million it already raised. But Butterfield said the additional capital will also help give large clients, as well as existing and future employees, confidence that Slack is here to stay.
“We have a lot of large customers,” he said, “and the bigger ones are a lot more conservative. As they move tens of thousands of people over to Slack they want to make sure we’re going to be around. But it especially helps with potential recruits. We still have to compete with Facebook and Google and they give substantial offers there.”
The company this month announced an expansion of its service to work in German, French, Spanish and Japanese as it competes with Microsoft Corp.’s Teams and Atlassian Corp.’s HipChat service for corporate customers.
SoftBank’s Vision Fund raised almost $100 billion this year and is blanketing the venture capital market and tech sector with the money. It invested $4.4 billion in shared-office company WeWork Cos. in August, and is mulling an investment in Uber Technologies Inc. of up to $12 billion with three other investors, Bloomberg has reported.
