What is Slacks' business model
"Slack is the biggest disruptor after Salesforce," says GP Bullhound. The M&A advisor and investor expects the B2B software provider to become one of the next tech titans with a valuation of $ 50 billion by 2025.
Slack started exactly ten years ago, originally as an instant messaging service for the US company Slack Technologies. It should facilitate communication within working groups. How great the potential of the long inconspicuous software company founded in Canada really is, became evident at the latest in June of this year when it was launched on the New York Stock Exchange.
When it went public, Slack chose the route of a direct placement, in which the securities are listed without the support of investment banks. This saves fees, but is considered riskier because the banks fail as middlemen and price stabilizers. The courage was rewarded. Investors fought for stocks on debut. At the start of trading, the price shot up by around 50 percent and opened at $ 38.5. The reference rate had been set at US $ 26 the previous evening.
Investor GP Bullhound, which has a stake in Slack, presents current figures for the office communications service. Accordingly, Slack is one of the fastest growing Software as a Service (SaaS) companies today.
In the last round of funding in August, Slack was valued at a good seven billion US dollars. Before it went public, it was almost $ 16 billion. In the first quarter, Slack's revenue rose 67 percent year-over-year to $ 134.8 million, but it posted an operating loss of 38.4 million.
Slack is used daily by around ten million employees from various companies, of whom over 85,000 are said to be paying customers. According to media reports, Slack has raised around one billion US dollars from donors since it started in 2013.
According to GP Bullhound, Slack is the biggest disruptor after Salesforce. The investor expects Slack to become one of the next tech titans by 2025, valued at $ 50 billion.
Why is Slack seen as having such great potential? The company is transforming the way people communicate and collaborate in B2B, with an impact similar to that of Salesforce in the early 2000s. Slack should develop into one of the leading providers of the most important software companies worldwide.
GP Bullhound estimates the total enterprise productivity market at about $ 230 billion and expects it to grow to $ 500 billion by 2024. Slack targets the collaboration space, which currently makes up about 14 percent of the total addressable market.
The business model is said to be unique: "Slack shows a rare combination of highly recurring sales and viral content. Growth that is driven by bottom-up and top-down customer acquisition channels, taking the best of both worlds: Enterprise SaaS and Instant Messenger, "said the investor.
The overall goal of Slack is to become a platform. They want to further establish themselves in the corporate environment - with a growing ecosystem of over 1,500 integrations based on the Slack API.
However, the planned ascent is not going to be problem-free. The fierce competition in particular is becoming a challenge. Slack primarily competes with Microsoft, Facebook, and Google, who have competing products. In the long run, this can lead to more expensive user acquisition and a higher price for customers as well as less revenue per customer.
There is also a special focus on the aspects of data protection and the protection of your own IT. Because data breaches in particular could mean the quick end for the child prodigy. Recently, the data protectionists of the Electronic Frontier Foundation (EFF) warned companies against the safe use of the Business Messenger. They call on Slack to give its users more data sovereignty and to increase the security of the service.
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