Slack Gets Slice of SoftBank’s $100 Billion Tech Bounty

Slack closed a $250 million funding round led by SoftBank Group Corp.’s Vision Fund, giving it more ammunition for expansion in an increasingly competitive market for workplace messaging services, according to Bloomberg.

The financing round values the startup at $5.1 billion, up from $3.8 billion the last time. The Vision Fund is joined by Accel and other investors, Slack said. More than half of the new funding came from SoftBank, Slack’s CEO Stewart Butterfield said in an interview. He said he was approached by Deep Nishar, managing director of investments at SoftBank, about 4 or 5 months ago.

Slack said the money is for “operational flexibility,“ not for a particular use, and added that it still has much of the $591 million it already raised. But Butterfield said the additional capital will also help give large clients, as well as existing and future employees, confidence that Slack is here to stay.

“We have a lot of large customers,“ he said, “and the bigger ones are a lot more conservative. As they move tens of thousands of people over to Slack they want to make sure we're going to be around. But it especially helps with potential recruits. We still have to compete with Facebook and Google and they give substantial offers there.“

The company this month announced an expansion of its service to work in German, French, Spanish and Japanese as it competes with Microsoft’s Teams and Atlassian’s HipChat service for corporate customers. Butterfield said he “looks forward“ to an initial public offering, but said it would not be before “the end of 2018.“