Slack Discloses $141 Million Loss as Messaging Start-Up Joins Tech Listing Rush

SAN FRANCISCO — Slack, the workplace messaging start-up, disclosed the details of its business in an offering prospectus on Friday as it joined the parade of tech companies that plan to publicly list their shares this year.

Sharing its financial results widely for the first time, Slack said that it collected $400.6 million in revenue in its latest fiscal year, which ended Jan. 31. That was nearly double what it generated in the previous fiscal year. It lost $140.7 million in the latest fiscal year, narrowing its losses from $180.9 million the year before.

The company had 88,000 paying customers at the end of the most recent fiscal year, up almost 50 percent compared with the previous year. Of those customers, 575 paid more than $100,000 for their subscriptions, contributing about 40 percent of the company’s revenue.

Friday’s filing sheds more light on Slack, which has grown out of a video game company into an increasingly common way for workers to communicate. Its software is meant to be a replacement for email — but it also lets colleagues chat, share files and more.

Slack’s filing followed the initial public offerings of two other high-profile start-ups, Lyft and Pinterest. The biggest tech public offering of recent years — that of the ride-hailing giant Uber — is also on deck, with Uber pricing its shares on Friday in a stock sale that is expected to value it at as much as $91 billion.

The I.P.O. boom has had mixed results. Lyft’s shares sank below their I.P.O. price after an initial spike last month. Pinterest’s stock has stayed above its offering price since its debut on the market this month.

But less-prominent start-ups that sell software to other businesses have performed better. Shares of Zoom, a video conferencing company, rose 80 percent on its first day of trading as a public company this month, and PagerDuty, which sells software to help companies respond to complaints and other incidents, experienced a first-day pop of 60 percent.

Investors typically like the predictable revenue of tech companies that sell software to businesses and are betting that companies will continue to increase their spending on these wares. Slack, which is pitching itself as doing “nearly anything that people do together at work,” will seek to benefit from that trend.

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Yet unlike most other Silicon Valley darlings going public this year, Slack is not holding an initial public offering, where it sells shares to the public. Instead it will carry out a “direct listing,” where it simply lets its shares start trading on a stock market. It plans to do on the New York Stock Exchange, under the ticker symbol “SK.”

The price of its stock would then be set solely by demand from public-market investors. The process has none of the safeguards of a traditional I.P.O., since the company will not sell shares that could help guarantee trading liquidity. That poses the risk of Slack’s market capitalization falling below the $7.2 billion that it was valued at by private investors last year.

The last major company to take this route was Spotify, which listed its shares last year. Like that music-streaming giant, Slack can do this kind of transaction because it does not need the money. The messaging service has taken advantage of the plentiful capital in private markets, amassing $1.2 billion in venture funding, half of it in the last two years.

Slack disclosed on Friday that it has $841 million in cash on its balance sheet, according to its prospectus.

(That does not mean Slack is shedding all the trappings of an I.P.O.: It has hired Goldman Sachs, Morgan Stanley and Allen & Company as advisers for its direct listing.)

Slack’s chief executive, Stewart Butterfield, has reveled in the easy money available to his company. “It might be the best time for any kind of business in any industry to raise money for all of history, like since the time of the ancient Egyptians,” he told The New York Times in 2015.

The company’s biggest shareholders include the investment firms Accel, Andreessen Horowitz and Social Capital and the Japanese technology titan SoftBank.

Slack grew out of TinySpeck, a gaming company created by Mr. Butterfield in 2010. TinySpeck’s game, Glitch, was a flop, but the team continued work on an internal communication tool it had built. That became Slack, which quickly spread among tech start-ups and now counts more than 10 million daily active users.

Its evolution mirrors that of Mr. Butterfield’s previous company, the photo-sharing site Flickr. That company also started out in online gaming but switched to a more promising tool its developers had built that allowed people to post their photos online. Yahoo bought Flickr in 2005.

Slack has resisted acquisition interest from Google, Microsoft and Amazon. Microsoft now has a competing product, Microsoft Teams, which more than 420,000 organizations are using. Facebook and Google have similar services.

Earlier this week, Slack held its annual Frontiers conference for customers and partners on a pier in San Francisco. Mr. Butterfield kicked off the event by saying Slack’s mission is to make people’s working lives “simpler, more pleasant and more productive.”

Slack’s customers have a common interest in figuring out how to do their best work, he said. “It’s a desire to create a better experience for your team,” he said.

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