Slack Technologies Inc. is raising $250 million in a round led by SoftBank Group and Accel Partners, according to a report published Wednesday.

Bloomberg, quoting people familiar with the matter, said the round will be raised at a valuation of more than $5 billion. It also said the deal allows employees and other shareholders of the popular team communications company to sell equity to the new investors, giving them a cash-out option in a company that has been operating for eight years but has yet to go public.

The $5 billion-plus valuation is a significant increase for Slack, which was valued at $3.8 billion when it raised $200 million in April 2016 and $2.8 billion when it raised $160 million in April the year prior. The figure, though, is well below a rumored $9 billion takeover price that was mentioned when rumors surfaced that Amazon.com Inc. was interested in the enterprise messaging platform provider.

Rumors of Slack looking to raise a new round first surfaced in June, when reports had the company attempting to raise $500 million at a $5 billion valuation. It would appear that the valuation figure was accurate but the raise figure was wrong. That means one of two things: The report was wrong, or Slack has failed to find enough interest in raising the larger figure.

The overall venture capital marketplace has grown in 2017, but that growth has not been distributed equally, with some suggesting that the VC boom in San Francisco, where Slack is based, is over. Slack, which has raised money over an unusually large nine rounds, may remain a popular service among companies in the Bay Area. But by the admission of Chief Executive Officer’s admission Stewart Butterfield, it has no plans to go public “for years,” limiting its appeal to VC firms that ultimately would be looking for a profitable exit.

What’s more, there’s a real risk that competitors such as Atlassian Corp. Plc make gains. The most notable new entrant is Microsoft Teams, a product that at least one survey indicated will overtake Slack within two years.

For a product that only launched in October last year, that may sound like a stretch. But with Slack offering only one product versus Microsoft Corp.’s huge range, the idea of the operating systems maker slaying Slack on its way to market dominance isn’t fanciful and has precedent. Just ask the former executives of Netscape Communications Corp., Lotus Development Corp., WordStar or any other software maker Microsoft has taken on in the past.

If the new round is confirmed at $250 million, Slack will have raised $890 million to date for a veritable who’s who of Silicon Valley venture capital firms and individual investors.

Photo: Robert Hof