Slack Draws Interest From Amazon

Corporate chatroom startup Slack has received recent inquiries about a potential takeover from technology companies including Amazon, a deal that would be the biggest ever for the internet-commerce giant, according to Bloomberg, citing people with knowledge of the situation.

Slack could be valued at at least $9 billion in a sale, the people said. An agreement isn’t assured and discussions may not go further, said the people, who asked not to be identified because the matter is private. Buying Slack would help Amazon bolster its enterprise services as it seeks to compete with rivals like Microsoft and Google. The company’s cloud-hosting unit, Amazon Web Services, in February unveiled a paid-for video and audio conferencing service, Amazon Chime, that lets users chat and share content. Representatives for Amazon and Slack declined to comment.

One of the companies interested in Slack has grown frustrated with its reticence on a potential sale and is ready to drop its pursuit if Slack doesn’t immediately engage, one of the people said. Slack is simultaneously pursuing a $500 million fundraising round that would value the company at $5 billion, said another of the people. That person said a sale and a funding round were equally likely at this point. The fundraising effort was reported earlier by Recode.

The launch of Chime put it in direct competition with Microsoft’s Skype and Cisco’s WebEx service in providing conferencing to corporate clients. The service was added to an increasing roster of AWS products, including security systems, a business intelligence service named Quicksight and hardware to allow customers to securely transfer large amounts of data -- all aimed at business clients.

Microsoft had considered acquiring Slack, but the discussions never got serious enough to involve CEO Satya Nadella or the company’s board. Slack raised $200 million in its latest funding round in 2016, led by Thrive Capital, valuing it at $3.8 billion. The company, which introduced its business chat software in 2013, has recently turned its eye to bigger users. In January, Slack debuted an enterprise version of its chat software that allows tens of thousands of employees to collaborate across teams at major corporations like IBM.

Slack’s Canadian born co-founder and chief executive officer, Stewart Butterfield, said last month in a Bloomberg TV interview that an IPO “would be years away,“ citing some unpredictability as the business continues to grow quickly. The company has about 800 employees across seven offices, including one recently opened in London. Slack has 5 million daily active users, 1.5 million of whom pay to use the service, and had $150 million in annual recurring revenue as of Jan. 31.