5 things to know about Slack's direct listing
The music-streaming service reminded tech unicorns late last year that companies don’t have to issue new shares or raise money through a traditional offering if they wish to go public, and now Slack is following in its footsteps. The business-chat company filed direct-listing paperwork on Friday.
Slack will be hoping its shares are better liked on Wall Street, though the company likely won’t undergo a traditional roadshow through which it can explain its financials to banks and investors in the way companies going the standard IPO route do. Founded in 2009, Slack admitted in its prospectus that it has “limited experience with respect to determining the optimal prices for Slack.” The company expects that it might need to change its pricing model periodically going forward.
On the opposite end, Slack has a huge base of organizations using the service for free, numbering more than 500,000 at the end of January. “This model facilitates rapid and efficient user adoption, particularly by empowering users to access Slack without the friction of payment or a formal sales interaction,” the prospectus said. “We believe free usage helps prospective paid customers realize the value of Slack and users spread the word organically throughout their networks and organizations.
During the final week of January, Slack saw its free and paid user base spend more than 50 million hours combined on the service, sending more than a billion messages. On a normal workday in that period, the company said, users on paid subscriptions were connected to Slack for an average of nine hours and spent more than 90 minutes actively engaging on the service.Competing with giants Uber Technologies Inc. UBER, +0.00% and Lyft Inc. LYFT, +1.
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