Blog Post

Slack lands $120M for its collaboration software and is now a billion-dollar company

Slack, the work-collaboration tool startup that’s become a big hit in recent months, said Friday that it scored $120 million in funding, bringing the company’s total investment to $180 million. With that large lump of cash comes a valuation of $1.12 billion, which is impressive considering the company launched to the public in February 2014.

The startup, whose founder Stewart Butterfield was a co-founder of Flickr, has made a name for itself in the burgeoning work-collaboration space, which seems to be the next area cloud providers are concentrating on in the storage wars. This past year saw [company]Google[/company], [company]Amazon[/company] and [company]Microsoft[/company] dropping their storage prices several times and as of summer, those big three cloud providers started touting their work-collaboration features as a way to entice new users. And just so no one’s left out, [company]Dropbox[/company] and [company]Box[/company] have also been showcasing their own tools as well.

The rise of Slack puts an interesting twist on the cloud providers’ strategy as [company]Slack[/company] aggregates all a team’s communications—from services like [company]Dropbox[/company], [company]GitHub[/company], [company]Twitter[/company] and others—into a central hub that’s also connected to a chat room where users can talk and share documents.

Slack uses Amazon Web Services as its infrastructure and place of storage for documents, Butterfield told me in an interview over the summer, and uses Solr for searching and indexing.

Graphic detailing Slack's interface
Graphic detailing Slack’s interface

Now that Slack has stolen the thunder from some of cloud provider’s work-collaboration tools (Butterfield said Slack is aiming to be the next Microsoft) it will be worth watching just what the cloud providers have up their sleeves as they try to convince folks to use their own work tools.

Kleiner Perkins Caufield & Byers (KPCB) and Google Ventures drove this funding round along with new investor David Sacks, founder of Yammer, and previous investors Andreessen Horowitz, Accel Partners and The Social+Capital Partnership.

Post and thumbnail images courtesy of Shutterstock user C Salisbury.