Slack Files for IPO, Spotify Acquires Gimlet and Anchor, Facebook Restricted by German Antitrust Watchdog: Newsletter February 8, 2019

Slack this week announced it has filed paperwork with the SEC for a 2019 IPO. Most recently valued at $7.1 billion, Slack is now among the most highly-valued privately held companies in the country. Reporting a current customer base of 10 million daily active users and 85,000 paying customers, the communications giant has not yet specified when they intend to list in 2019.

Elsewhere in SaaS news, Spotify announced the acquisition of podcast firms Gimlet and Anchor this week. The two acquisitions come following Spotify’s Q4’18 earnings statement reported the first quarterly profit in the company’s history. While monthly active users for the quarter showed strong growth of 29% year over year, Founder Daniel Ek stated of the acquisitions, “We believe it is a safe assumption that, over time, more than 20% of all Spotify listening will be non-music content.” Spotify has allocated up to $500 million for new acquisitions in the near future.

In data legislation news, Facebook’s data gathering practices were recently restricted by German antitrust authority Bundeskartellamt. Grounds for the legislation enforcement included Facebook abusing its market dominance to collect, merge and utilize users data. Specifically, Facebook would no longer be allowed to merge user data from WhatsApp and Instagram.

Featured in e-commerce business listings this week we have a $600K fashion and apparel business, with proven market fit with a diversified portfolio of thousands of high-quality SKUs, customer repeat rate of 14%, strong organic search traffic with keyword rankings for over 40,000 keywords and extensive social media presence with hundreds of thousands of social media followers. If you are interested in this business, please follow the link to request a prospectus.

In events news this week, super early bird pricing for LTV Conf has been extended through TODAY and ends tonight at 11:59pm EST! Tickets are currently 75% off full price and are the lowest they will ever be until prices go up tomorrow, so don’t wait! Discounts are offered to bigger groups, so make sure to bring your team, and use code FEINTERNATIONAL10 at checkout for an extra 10% off. Up to 400 invited SaaS Founders, Executives and Investors from private and public companies will be in attendance making this the perfect place to learn and network.

Some of the confirmed speakers include:

• Nathan Barry, Founder and CEO of ConvertKit
• Kathryn Minshew, CEO and Founder of The Muse
• Dan Martell, Angel Investor and Chief Instigator at SaaS Academy
• David Hauser, Founder of Grasshopper and Chargify
• April Dunford, Executive Consultant for Market Strategy and Product Positioning
• Claire Suellentrop, Co-Founder of Forget the Funnel and customer feedback expert
• Lauren Foundos, Founder and CEO of FORTË

Founder Thomas Smale had a great time hosting networking drinks at SaaStr this week! Keep an eye out on Facebook for pictures from the event and be sure to tag yourself. Next week, Thomas is heading to Startup Grind from February 12-13 in Redwood City, CA to meet up with fellow global thought leaders and entrepreneurs. Make sure to RSVP here if you will be in the area!

Continue reading below for more on Slack’s IPO, Spotify’s podcast acquisitions and Facebook’s data restrictions.

Listings

Featured

E-Commerce – Fashion & Apparel – $86K gross/mo

• Proven market fit with a diversified portfolio of thousands of high-quality SKUs
• High customer repeat rate of 14% since launch
• Strong organic search traffic with keyword rankings for over 40,000 keywords
• Extensive social media presence with hundreds of thousands of social media followers

Yearly net profit: $296,000
Asking price: $600,000

Sold

Display Advertising – Criminal Locator Database – $2.7K gross/mo

Display Advertising – Music & Lyrics – $2.6K gross/mo

SaaS – Recruitment Automation Platform – $1.4K MRR

In The News…

Slack Files for IPO

Intra-office communication dominant player Slack has announced they have submitted paperwork to the SEC for a 2019 IPO.

Rumors of the company’s intentions to list surfaced in 2018, and this is the first concrete move towards an IPO since speculations first arose. Slack is only five years old, which puts it below the median 10 years before an IPO that most major SaaS companies wait. A recent $427 million funding round in August brought the company’s total VC raised to over $1 billion, and valued the business at $7.1 billion. Slack is now one of the most valuable private businesses in the US cementing its position as one of the most valuable privately held businesses in the U.S. and as of January 2019, reports 10 million DAU and 85,000 paying clients. SensorTower reported to TechCrunch via direct communication that Slack increased new users on mobile roughly 21% in Q4’18 compared to Q4’17, with total mobile installs netting an increase of 24 million. Total installs reached 8 million in 2018, an increase of 21% on 2017.

Slack is anticipated to hold a direct listing, following Spotify’s example from April of last year.

Spotify Acquires Gimlet and Anchor

Spotify has this week announced their acquisition of podcast hosting firms Gimlet and Anchor.

The acquisitions come following recent announcements that the Swedish music streaming company plans to expand heavily into the podcasting space in order to capitalize on the advertising revenue available. While Spotify did not disclose the price for either deal, Gimlet is reported to have been a $230 million investment for Spotify. Founder and CEO Daniel Ek has stated that tapping into the podcasting market will be a core part of their strategy for expanding into revenue channels outside of music streaming. “Our core business is performing very well. But as we expand deeper into audio, especially with original content, we will scale our entire business.”

Spotify reported the company’s first ever quarterly profit for Q4’18 and as of December had 96 million paying subscribers.

German Data Watchdog Restricts Facebook

Germany’s antitrust authority ruled this week that Facebook is guilty of abusing its influence in the market in the way it collected, merged and used user data.

Bundeskartellamt, the German antitrust watchdog, is imposing restrictions on the processes Facebook uses to gather user data consent. One of the biggest changes will involve the requiring of explicit consent to combine user data between Instagram and WhatsApp. The authority is imposing these restrictions following a three-year investigation into the social media giant and will provide Facebook one month to counter the imposition of these restrictions. Facebook stated, “The Bundeskartellamt underestimates the fierce competition we face in Germany, misinterprets our compliance with GDPR and undermines the mechanisms European law provides for ensuring consistent data protection standards across the EU.”

Facebook revealed in a blog post this week that they intend to appeal the decision.

For more updates throughout the week on the financial world of online business M&A, follow our team on Facebook, LinkedIn, Twitter and Instagram.