$5.1 billion Slack has added 2 million more users as it battles Microsoft and ramps towards a possible IPO
- Slack has grown its daily active users by 33%, to 8 million, since September, the company said on Tuesday.
- Its paid users have also grown to 3 million — up 50% from September.
- Slack, which was last valued at $5.1 billion, is expected to go public in the upcoming months.
- These new numbers show that it’s still growing, and acquiring the paid subscribers necessarily to become profitable. But it’s still facing steep competition from the likes of Microsoft and its competing Microsoft Teams.
Slack may play coy about whether or not it intends to hit the public markets in 2018, but it’s not holding back when it comes to discussing its success with users.
On Tuesday, the popular business messaging app announced that it now has 8 million daily active users, up 33% from the 6 million users reported by the company in September 2017.
Slack also said it now has 70,000 paid teams and 3 million paid users — up from 50,000 and 2 million, respectively, in September.
Still, Slack is facing a steep competitive field. In March 2018, Microsoft announced that its Teams product, a competitor to Slack, is being used by 200,000 organizations. While Slack is popular, and generally well-liked by its users, Microsoft bundles Teams in with its Office 365 cloud productivity suite for businesses, giving it an edge.
Slack hasn’t officially announced any plans to go public, but analysts expect that an IPO could happen sooner rather than later. The company was last valued at $5.1 billion in a $250 million funding round from SoftBank and Accel in July 2017. That deal saw its valuation shoot up from $3.8 billion in 2016.
While user growth for any company is key, Slack’s ability to grow its paid subscribes will be front of mind for investors who have followed Dropbox and Spotify in their blockbuster IPOs earlier this year.
Both companies are based on the same freemium model as Slack, which aims to acquire paid users by getting them hooked on the free product. And both had to answer to investors about how they plan to convert enough paying subscribers to push their businesses into profitability.
Like Dropbox and Spotify, Slack isn’t profitable. In September, the company said it has an annual recurring revenue (ARR) of $200 million, an extrapolation of how much money it will make over the next 12 months based on its current performance. It hasn’t shared publicly how much money it loses.
But as a tool designed to help teams collaborate more efficiently, Slack has always had an eye on enterprise customers. And its growth numbers show that the company is confident in its ability to keep those paid users coming.
Here are the specific stats shared by the company:
- 8 million daily active users
- More than 3 million paid users
- 70,000 paid teams
- 65% of companies in the Fortune 100 pay to use Slack
- More than half of Slack users are outside the U.S.
- Italy is Slack’s fastest-growing market outside of the US when it comes to paid users
- Austria has the most newly paid teams outside of the US
- Japan just passed the United Kingdom as its second biggest market by daily active users