Slack Technologies has been “seriously” considering to make its stock exchange debut via a direct listing. This was revealed by a source familiar to the matter and was reported by Reuters on Friday.
The Wall Street Journal reported that Slack operated a popular workplace instant-messaging and a collaboration app, and both of these might make a debut in the second quarter and is being expected to do so through a direct listing.
This plan of being a direct listing will make Slack the second big technology company after Spotify Technology SA which bypassed a traditional IPO process when going public.
Daniel Lugasi, a portfolio manager at Florida-based VL Capital Management said- “Slack’s direct listing is an inherently less expensive way of going public, but what it really comes down to is speed. Venture capital firms which have invested in Slack are “looking for an exit and with the rapid growth of Microsoft Teams, they want to get out from there fast. The direct listing provides the VCs with a quick exit and we believe that this is the mitigating factor behind Slack seeking a direct listing.”
Slack didn’t comment on reports regarding the direct listing.
Slack is an internet-based platform which allows teams and businesses to communicate with each other and its closest competitor includes Microsoft Teams, which is a free chat add-on for Microsoft’s Office365 users.
Slack has raised about $1.2 billion in 11 funding rounds and currently has 36 investors and this data was provided by CrunchBase. The investors include SoftBank, T. Rowe Price, and Sands Capital Ventures, General Atlantic.
Reuters reported that in December, Slack had hired investment bank Goldman Sachs Group in order to lead its initial public offering as an underwriter.