Slack’s British Co-Founder To Net Windfall From $16 Billion IPO

Cal Henderson, the Brit that is one of messaging app Slack’s co-founders looks set to end next week around $400 million (£315 million) richer when the company’s IPO concludes next Thursday. Slack’s IPO valuation looks set to come in at $16 or $17 billion, a huge leap from the $7.1 billion valuation it conducted its last private investment raise at last August.

It’s also a significant climb from the $13 billion-ish valuation expected just a few months ago and despite the post IPO travails of Uber and Lyft, other big tech floats to have taken place so far in 2019. Pinterest has fared better and is up on its IPO price.

The $16 billion valuation is based on the price that shares in the company have been changing hands at through private transactions over the past couple of months and represents roughly 21 times projected revenues over 2021. It would put the value of Henderson’s holding at around $436 million and that of Stewart Butterfield, the Canadian who is the other co-founder and chief executive at over $1 billion.

The Slack messaging app is mainly used professionally rather than for personal communications and has become a popular alternative to email for teams to chat, collaborate and share documentation. The company was founded back in 2009 in Vancouver and became the fastest ever start-up to reach ‘unicorn’ status by achieving a $1 billion valuation within just 15 months. The company has since moved its headquarters to San Francisco, on the doorstep of Silicon Valley.

Slack’s IPO takes an alternative route to the norm. Rather than sell shares to institutional and retail investors at a fixed IPO price ahead of them trading live on the stock exchange, Slack will simply list its shares directly with no pre-sale. The approach is referred to as a ‘direct listing’.

The co-founders could have made their fortunes by selling out of Slack some time ago with Amazon offering $9 billion for the company in 2017 and Microsoft having an earlier $8 billion bid rebuffed. Not bad for a messaging app created by ‘accident’. Slack started as a personal ‘side project’ of Henderson and colleagues working on a computer game that was never released to market. It was an in-house system for the developers, designers and animators working on the game to message each other and share what they were working on.