Slack Technologies, LLC
FormerlyTiny Speck (2009–2014)
TypeSubsidiary
IndustryInternet (formerly video games)[1]
Founded2009 (2009) in Vancouver, British Columbia, Canada[2]
Founders
HeadquartersSalesforce Tower
San Francisco, California, U.S.
Area served
Worldwide
Key people
Lidiane Jones (CEO)
ProductsSlack
RevenueIncrease US$903 million (2020)[4]
Increase US$−300 million (2020)[4]
Number of employees
2,545 (January 2021)[4]
ParentSalesforce
Websiteslack.com

Slack Technologies, LLC is an American software company founded in 2009 in Vancouver, British Columbia, known for its proprietary communication platform Slack. Outside its headquarters in San Francisco, California, Slack operates offices in New York City, Denver, Toronto, London, Paris, Tokyo, Dublin, Vancouver, Pune, and Melbourne.[5][4]: 66 

On June 20, 2019, Slack Technologies went public on the New York Stock Exchange via a direct stock listing.[6] On December 1, 2020, Salesforce announced its acquisition of Slack for $27.7 billion.[7] On July 21, 2021, the acquisition was closed.[8]

History

Slack logo used between August 2013 and January 2019

Initial funding and Glitch

The company goes back to the San Francisco based startup Tiny Speck, which was headed by Stewart Butterfield, the co-founder of the photo sharing site Flickr.[9] Tiny Speck received angel funding of $1.5 million in 2009,[10] followed by Series A funding of $5 million in 2010 from Accel and Andreessen Horowitz.[11] A Series B round of $10.7 million was raised in 2011.[12]

Tiny Speck's first product was a computer game called Glitch—a social MMORPG with highly stylized 2D graphics. The gameplay was described as follows: "players must learn how to find and grow resources, identify and build community and, at the higher levels of the game, proselytize to those around them".[13] Glitch launched on September 27, 2011,[14][15] but subsequently "unlaunched" on 30th November to improve gameplay.[16][17]

In November 2012, it was announced that Glitch would be closed, effective December 9, 2012.[1]

Slack and further funding

The New York Stock Exchange Building after Slack's direct offering on the NYSE – June 20, 2019

After the closure of Glitch, the company launched the Slack real-time collaboration app and platform, raising $17 million in funding from Andreessen Horowitz, Accel, and Social Capital.[18] After the launch of Slack, the company renamed itself to Slack Technologies in August 2014.[19] The name is an acronym for "Searchable Log of All Conversation and Knowledge".[20] Slack had been an internal tool used for the development of Glitch.

The company raised $42.75 million in April 2014.[21] In October 2014, the company raised $120 million in venture capital with a $1.2 billion valuation led by Kleiner Perkins and GV.[22] Earlier investors Andreessen Horowitz, Accel, and Social Capital also participated in this round.[22]

In January 2015, Slack announced the acquisition of Screenhero, a specialist in voice, video, and screen sharing.[23][24] In March 2015, Slack signed a deal with investors to raise up to $160 million in a funding round that valued the company at $2.76 billion. New investors include Institutional Venture Partners, Horizons Ventures, Index Ventures, and DST Global.[25]

In April 2015, the company raised another $160 million.[26] In May 2015, Social Capital was a leading investor in a funding round for Slack Technologies.[27]

In April 2016, Slack raised another $200 million, led by Thrive Capital, with participation by GGV, Comcast Ventures and existing investors, including Accel, Index Ventures, and Social Capital.[28][29] In 2016, Slack was ranked #1 on the Forbes Cloud 100 list.[30] In September 2017, Slack raised $250 million, the majority of which came from Softbank Vision Fund, with about 45% of that, or $112.5 million, originally from the Public Investment Fund of Saudi Arabia.[31][32] This round put Slack's total fundraising at $841 million and its valuation at $5.1 billion (including cash raised).[33] In early 2018, Slack announced the company's first CFO, Allen Shim.[34]

On July 26, 2018, Atlassian announced the shutdown of its competing HipChat and Stride effective February 11, 2019, and the sale of their intellectual property to Slack.[35] Slack was to pay an undisclosed amount over three years to assume the user bases of the services, and Atlassian was to take a minority investment in Slack. The companies also announced a commitment to work on integration of Slack with Atlassian services.[36][37]

In September 2018, it was announced the firm was preparing for an initial public offering in the first half of 2019.[38] In November 2018, Slack was recognized in Credit Suisse AG's inaugural Disruptive Technology Recognition (DTR) Program, an annual recognition of five top companies who are disrupting traditional enterprise information technology.[39] On January 16, 2019, Slack announced the launch of the company's new logo.[40]

On December 11, 2018, it was reported that Slack was considering a direct public listing.[41] In the lead-up to its DPO, Slack reported that it had generated $400.6 million in revenue for the fiscal year ending January 31, 2019, up from $220.5 million in the previous year[42] and up from $105.2 million in 2017.[43] Slack also reported losses of $138.9 million for the fiscal year ending in January 2019.[42][44] On February 4, 2019, several media news outlets reported that Slack had filed for taking the company public. According to The Wall Street Journal, sources indicated the company would pursue a Direct Listing Process (DLP) instead of the traditional IPO.[45][46] On April 26, 2019, Slack filed its Form S-1 to go public through a direct listing on the New York Stock Exchange,[47] similar to Spotify in 2018.[48] Its stock, ticker WORK, started trading on June 20, 2019. The NYSE set a reference price of $26 to start off trading and the stock rose to more than $41 in the initial hours of trading. It was delisted in June 2021 after Salesforce completed is acquisition, and shareholders were given Salesforce stock.[49]

On November 13, 2019, Slack announced the formation of its partner channel as part of its focus on enterprise clients.[50]

On February 10, 2020, it was reported that IBM will deploy Slack to all of its 350,000 employees, making IBM Slack's largest client to date.[51]

On November 25, 2020, the Wall Street Journal reported that Salesforce was in advanced talks to acquire Slack.[52] The company announced its planned acquisition of Slack on December 1, 2020, for over $27 billion in cash and stock.[53]

Slack announced it would move its headquarters from Foundry Square to Salesforce Tower by the end of February 2023, as part of a consolidation plan by Salesforce.[54]

Litigation

In July 2020, Slack filed a lawsuit with the European Commission accusing Microsoft of anticompetitive behavior. Slack alleges that Microsoft illegally bundled their competing Microsoft Teams collaboration product with the Microsoft office suite.[55]

State court class action

In October 2020, investors plaintiffs filed a class action lawsuit against Slack in the California State Superior Court of San Mateo County, alleging securities violations.[56] Plaintiffs claimed, on behalf of individuals who alleged that they acquired Slack Class A common stock in Slack’s June 2019 direct public offering, that Slack violated Sections 11, 12, and 15 of the Securities Act of 1933 because its IPO documentation allegedly had untrue statements and material omissions.[56]

Federal court class action

Earlier, in April 2020, Judge Susan Illston of the United States District Court for the Northern District of California had issued an order partially granting Slack’s motion to dismiss a similar federal class action complaint against Slack, Pirani v. Slack Technologies.[57] Typically, plaintiffs in Section 11 class actions must show they can trace their shares of stock in the issuer back to the relevant offering.[58] If there have been multiple registration statements, plaintiffs must prove that the shares they purchased were issued under the allegedly false or misleading registration statement.[58] Illiston held that a direct listing is different than the normal offering. This is in one respect true, in that unlike a traditional IPO consisting of "new" shares being offered to the public, a direct listing permits insiders and certain early investors to immediately sell their already outstanding shares, which are immediately tradeable on a stock exchange.[59] In Slack's direct listing, Slack offered 118 million registered shares for resale while at the same time another 164 million unregistered shares also became available without registration pursuant to exemptions to the Securities Act registration requirements.[59] Slack moved to dismiss, arguing that the plaintiff lacked standing because he could not trace his shares back to the registration statement that he claimed was misleading.[59] The judge opined -- in an opinion that was later overturned -- that that requires a broader reading of Section 11 of the '33 Act of the phrase “such security,” meaning: “acquiring a security of the same nature as that issued pursuant to the registration statement.”[57] As a result, she denied defendant’s motion to dismiss the case under Section 11.[57] At the same time, she granted the motion to dismiss partially (as to claims that Slack misled plaintiffs regarding Slack's scalable architecture), and she also found the statements in the “Key Benefits” portion of Slack's registration statement to be unactionable.[57]

On September 20, 2021, the Ninth Circuit issued a split decision -- ultimately overturned, affirming the district court.[59] The dissent, citing established precedent, said that Congress provided for strict liability for issuers in Sections 11 and 12(a)(2), but chose to temper that by "limiting the class of plaintiffs who can sue."[59] The dissent therefore was of the opinion that Sections 11 and 12(a)(2) confer standing only on plaintiffs who purchased securities issued pursuant to the registration statement containing the allegedly false or misleading disclosure.[59]

In December 2022, the U.S. Supreme Court granted certiorari in Pirani v. Slack Technologies, Inc.[60][59][61] The U.S. Supreme Court ultimately noted in its unanimous June 2023 decision that lower federal courts had held since the 1960s that liability under Section 11 of the Securities Act of 1933 attaches "only when a buyer can trace the shares he has purchased to a false or misleading registration statement."[62] It held that "because we think the better reading of the particular provision before us requires a plaintiff to plead and prove that he purchased shares traceable to the allegedly defective registration statement, we vacate the Ninth Circuit’s judgment holding otherwise."[62]

References

  1. 1 2 "A Sad Announcement from Tiny Speck". Glitch. Archived from the original on November 17, 2012. Retrieved November 17, 2012.
  2. ↑ "Tiny Speck Finds More Than a Glitch and Closes Game for Good". TechVibes. Archived from the original on April 19, 2015. Retrieved April 19, 2015.
  3. ↑ "Slack's Co-Founders Take Home The Crunchie For Founder Of The Year". Salesforce.com. February 6, 2015. Archived from the original on April 1, 2019. Retrieved April 19, 2015.
  4. 1 2 3 4 "Slack Technologies, Inc. 2020 Annual Report (Form 10-K)". U.S. Securities and Exchange Commission. March 29, 2021.
  5. ↑ Jones, Stephen (September 29, 2021). "Slack is telling execs to limit their office days to 3 a week to encourage other staff to work from home". Business Insider.
  6. ↑ "Slack Just Went Public and the Stock Is Trading Well Above Expectations". Barron's. Archived from the original on June 20, 2019. Retrieved June 20, 2019.
  7. ↑ "Salesforce buys Slack in a $27.7B megadeal". Techcrunch. December 2, 2020. Archived from the original on December 1, 2020. Retrieved December 2, 2020.
  8. ↑ "Salesforce closes $27.7 billion acquisition of Slack". finance.yahoo.com. July 21, 2021. Retrieved July 21, 2021.
  9. ↑ Terdiman, Daniel (November 18, 2013). "Tiny Speck releases entire Glitch art archives into public domain". CNET. Retrieved December 19, 2021.
  10. ↑ Mathew Ingram (February 9, 2010). "Q&A with Stewart Butterfield on the launch of Glitch". GigaOM. Archived from the original on May 24, 2010. Retrieved September 17, 2010.
  11. ↑ Om Malik (April 2010). "Stewart Butterfield's Tiny Speck Raises 5 Million from VCs". GigaOM. Archived from the original on September 21, 2010. Retrieved September 17, 2010.
  12. ↑ Geron, Tomio (April 12, 2011). "Tiny Speck Lands $10.7M From Accel Partners and Andreessen Horowitz". Forbes.
  13. ↑ Daniel Terdiman. "In depth with Tiny Speck's Glitch". CNet. Archived from the original on October 8, 2011. Retrieved September 17, 2010.
  14. ↑ "A Flickr Founder's Glitch: Can A Game That Wants You To Play Nice Be A Blockbuster?". Fast Company. September 27, 2011. Archived from the original on July 12, 2012. Retrieved September 30, 2011.
  15. ↑ "Vancouver's Tiny Speck puts massively multiplayer game Glitch online". Vancouver Sun. September 27, 2011. Archived from the original on September 29, 2011. Retrieved September 30, 2011.
  16. ↑ "Glitch 'unlaunches' to add new features - Massively". Archived from the original on September 25, 2018. Retrieved December 2, 2011.
  17. ↑ "The Big Unlaunching | Glitch Blog". November 23, 2013. Archived from the original on November 23, 2013. Retrieved February 27, 2023.
  18. ↑ "Flickr Co-Founder Stewart Butterfield Turns to Workplace Communication Tools With Slack". Archived from the original on November 25, 2013. Retrieved February 28, 2014.
  19. ↑ "Tiny Speck is no more. We're now Slack Technologies, Inc. See @SlackHQ. Bye!". Twitter. August 28, 2014. Archived from the original on April 17, 2017. Retrieved March 24, 2017.
  20. ↑ Kim, Eugene (September 27, 2016). "Slack, the red hot $3.8 billion startup, has a hidden meaning behind its name". UK Business Insider. Archived from the original on November 19, 2019. Retrieved October 13, 2018.
  21. ↑ Lunden, Ingrid (April 25, 2014). "Slack, Stewart Butterfield's Collaboration Software Startup, Has Raised $42.75M". TechCrunch. Archived from the original on July 6, 2017. Retrieved January 28, 2015.
  22. 1 2 Hern, Alex (November 3, 2014). "Why Slack is worth $1bn: it's trying to change how we work". The Guardian. Archived from the original on October 8, 2018. Retrieved October 13, 2018.
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  25. ↑ Macmillan, Douglas. "Slack's Valuation More Than Doubles to $2.8 Billion in Five Months". Wall Street Journal. Archived from the original on September 8, 2017. Retrieved March 28, 2015.
  26. ↑ Lunden, Ingrid (April 15, 2015). "Used Daily By 750K Workers, Slack Raises $160M, Valuing Collaboration Startup At $2.8B". Techcrunch. Archived from the original on July 6, 2017. Retrieved April 15, 2015.
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  30. ↑ "Forbes Cloud 100". Forbes. Archived from the original on October 28, 2016. Retrieved October 28, 2016.
  31. ↑ Fiegerman, Seth. "Silicon Valley wrestles with Saudi Arabia ties". CNN Business. Archived from the original on October 16, 2018. Retrieved October 16, 2018.
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  34. ↑ Miller, Ron. "Slack names Allen Shim as company's first CFO". TechCrunch. Archived from the original on February 9, 2018. Retrieved February 8, 2018.
  35. ↑ Miller, Ron (July 26, 2018). "Slack forms key alliance as Atlassian throws in the towel on enterprise chat". TechCrunch. Archived from the original on October 1, 2018. Retrieved October 13, 2018.
  36. ↑ Etienne, Stefan (July 26, 2018). "Slack buys HipChat with plans to shut it down and migrate users to its chat service". The Verge. Archived from the original on August 14, 2018. Retrieved October 13, 2018.
  37. ↑ Kumparak, Greg (July 26, 2018). "Atlassian's HipChat and Stride to be discontinued, with Slack buying up the IP". TechCrunch. Archived from the original on October 9, 2018. Retrieved October 13, 2018.
  38. ↑ Farrell, Maureen (September 28, 2018). "Slack Actively Preparing for Early 2019 IPO". Wall Street Journal. ISSN 0099-9660. Archived from the original on October 1, 2018. Retrieved October 1, 2018.
  39. ↑ Byrne, Karina (November 20, 2018). "Credit Suisse AG Announces the Disruptive Technology Recognition Program". Credit Suisse (Press release). Archived from the original on August 30, 2019. Retrieved August 29, 2019.
  40. ↑ "Say hello, new logo". Several People Are Typing. January 16, 2019. Archived from the original on October 31, 2019. Retrieved July 29, 2019.
  41. ↑ Term Sheet: A Direct Public Debut, Fortune, archived from the original on December 12, 2018, retrieved December 13, 2018
  42. 1 2 Fiegerman, Seth; O'Brien, Sara Ashley (April 26, 2019). "Slack files to go public with an unusual approach". CNN. Archived from the original on August 28, 2019. Retrieved May 7, 2019.
  43. ↑ Taulli, Tom. "What You Need To Know About The Slack IPO". Forbes. Archived from the original on August 28, 2019. Retrieved May 7, 2019.
  44. ↑ Feiner, Lauren (April 26, 2019). "Slack files to go public, revealing $400 million in revenue and $139 million in losses". CNBC. Archived from the original on November 2, 2019. Retrieved May 24, 2019.
  45. ↑ Farrell, Maureen (February 4, 2019). "Slack Files Confidentially to Go Public With Direct Listing". Wall Street Journal. ISSN 0099-9660. Archived from the original on November 2, 2019. Retrieved February 4, 2019.
  46. ↑ Feiner, Lauren (February 4, 2019). "Slack confidentially files to go public". www.cnbc.com. Archived from the original on November 2, 2019. Retrieved February 4, 2019.
  47. ↑ "Form S-1 Registration Statement". www.sec.gov. Archived from the original on November 4, 2019. Retrieved May 7, 2019.
  48. ↑ "Slack files to go public, reports $138.9M in losses on revenue of $400.6M". TechCrunch. April 26, 2019. Retrieved April 29, 2019.
  49. ↑ MarketScreener (July 21, 2021). "Slack Technologies : Completion of Acquisition or Disposition of Assets (Form 8-K) | MarketScreener". www.marketscreener.com. Retrieved November 11, 2021.
  50. ↑ "Slack Services Partners To Help Vendor Target Enterprises". Archived from the original on July 9, 2020. Retrieved May 10, 2020.
  51. ↑ "Slack skyrockets 21% after making IBM its biggest account yet (WORK)". Business Insider. Archived from the original on February 10, 2020. Retrieved February 10, 2020.
  52. ↑ Lombardo, Cara (November 25, 2020). "Salesforce Is in Advanced Talks to Buy Slack Technologies". Wall Street Journal. Archived from the original on November 30, 2020. Retrieved November 30, 2020.
  53. ↑ Levy, Ari (December 1, 2020). "Salesforce acquires Slack for over $27 billion, marking cloud software vendor's largest deal ever". CNBC. Archived from the original on December 3, 2020. Retrieved December 3, 2020.
  54. ↑ Robison, Kylie (February 13, 2023). "Slack is ditching its stunning San Francisco headquarters — designed to make workers feel like they were in waterfalls and glaciers — and moving into Salesforce Tower to cut costs". Fortune.
  55. ↑ "Slack Accuses Microsoft of Illegally Crushing Competition". The New York Times. July 22, 2020. Archived from the original on August 28, 2020. Retrieved September 1, 2020.
  56. 1 2 "First Amended Complaint Filed In Consolidated Slack Securities Suit - Tech Giants". October 7, 2020. Archived from the original on December 31, 2020. Retrieved November 23, 2020.
  57. 1 2 3 4 "Slack Direct Listing Lawsuit Partially Dismissed - Tech". April 24, 2020. Archived from the original on October 24, 2020. Retrieved November 23, 2020.
  58. 1 2 "US Supreme Court to Hear Appeal Regarding Securities Act Claims in Direct Listings". JD Supra.
  59. 1 2 3 4 5 6 7 "Supreme Court To Weigh In On Securities Act Of 1933 Standing In Slack Technologies Direct Listing Appeal | MarketScreener". www.marketscreener.com. December 20, 2022.
  60. ↑ Eichenberger, Katten Muchin Rosenman LLP-Sarah; Zelichov, Richard H. (December 15, 2022). "Supreme Court to Weigh in on Securities Act of 1933 Standing in Slack Technologies Direct Listing Appeal". Lexology.
  61. ↑ https://www.supremecourt.gov/DocketPDF/22/22-200/242285/20221003121846238_2022-10-03%20%20No.%2022-200%20Slack%20-%20Chamber%20Cert%20Amici%20Brief.pdf
  62. 1 2 Slack v. Prani, Supreme Court of the United States (2023).
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