UPDATED 02:49 EST / JUNE 15 2017

APPS

Report: Amazon has spoken to Slack about a potential $9B acquisition

Amazon.com Inc. may be interested in acquiring enterprise messaging platform provider Slack Technologies Inc., according to a report published early Thursday morning.

Bloomberg, citing people with knowledge of the matter, claims that Slack has received recent inquiries about a potential takeover from Amazon as well as other unnamed companies. The talks are said to be ongoing, with the same people saying that an acquisition isn’t assured and that the discussions may not go further.

The same report claims that the deal would price Slack at $9 billion, well up from the $3.8 billion at which it was valued when it raised $200 million in April 2016 and a valuation of $2.8 billion in April the year prior.

A report Thursday by Kara Swisher at Recode said Slack is in the process of raising $500 million at a $5 billion valuation, mentioning the reality that many companies get interest from suitors during fund-raising. Recode also said Google Inc., Microsoft Corp. and Salesforce.com Inc. have all shown interest in buying Slack.

Founded in 2009 by Stewart Butterfield (pictured), previously best known as the co-founder of photo sharing site Flickr, the company has become the go-to enterprise messaging platform. It has about 5 million daily active users and more than 1.5 million paying corporate customers, including many tech startups and companies in Silicon Valley and San Francisco.

It came to widespread fame in January 2015 when it was used as the poster company for what Forbes dubbed a unicorn. That’s a company with a private valuation of $1 billion or more, a figure Slack achieved eight months after launching its main product.

An Amazon acquisition seems somewhat unlikely, especially at a price that is several times what the retail and cloud giant has paid for any other acquisition. And although Amazon has been taking baby steps into productivity services on its cloud, Slack would still be somewhat of a departure from its strategy so far. Still, Amazon hasn’t been shy about jumping into new market areas, as its own cloud computing service itself demonstrates.

Despite its popularity among tech firms in particular, Slack has lots of competition. Publicly held Australian firm Atlassian Ltd. offers Confluence, team collaboration software that can be subscribed to, as with Slack, as a cloud-based software-as-a-service offering or downloaded and hosted privately within a corporate environment. The most recent entrant to the business is Microsoft, which launched its Teams service as part of its cloud-based Office365 suite in March. How many users Microsoft has obtained since launching isn’t clear, but at least one survey claimed that the product may well surpass Slack’s user base within two years.

While the competition may be increasing, Slack has not rested on its laurels and has continued to expand its offering, ranging from PayPal Inc. integration to video calling to support for bots, with the latter being supported by Slack’s own $80 million bot fund.

The Bloomberg report may indicate nothing more than a friendly chat versus advanced acquisition talks. But if they amount to more and the purchase price does come in at $9 billion it will be a very nice payday from a company that has raised $540 million to date. Investors in Slack include Slow Ventures, The Social+Capital Partnership, Accel Partners, Andreessen Horowitz, Google Ventures and Kleiner Perkins Caufield & Byers.

Photo: Robert Hof

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