Slack is amid active preparations for a 2019 IPO, according to sources familiar with the matter. Reportedly expecting a valuation of $7 billion or higher, the intra-office communication market leader could file for public listing as early as the first quarter of 2019. Slack was valued at $5.1 billion in 2017 and has since surpassed 8 million daily active users, 3 million paid users and raised $427 million in a funding round led by Dragoneer Investment Group and General Atlantic. While Slack has consistently remained in a diligent multi-year IPO preparation process, the company has recently taken specific steps towards a listing on the public market. Slack has raised over $1 billion in lifetime funding.
In financial news, blockchain has this week been predicted to represent a $7 billion market by analysts at Bank of America. Blockchain-as-a-Service (BaaS) could reach the $7 billion market opportunity at a level of just 2% of the world’s servers functioning as blockchain nodes. As more companies seek to enter the blockchain space but demonstrate hesitation to build the infrastructure in-house or hire out developers, cloud providers are increasingly offering the service in subscription format (Microsoft, Amazon, IBM and Oracle chief among them). Bank of America’s predication comes at “the early innings of this blockchain wave,” according to IDC blockchain researcher Bill Fearnley Jr.
Digital marketing news this week saw Google announce that Google Ads will be moving to a completely updated platform for users’ centralized advertising management. Beginning October 18th, advertisers will only have access to the new Google Ads platform and the legacy experience will no longer be available. Features like call bid adjustments and new shopping campaigns will be available on the platform, and any saved reports, filters and automated rules will be automatically transferred to the new version.
Elsewhere in the world of IPOs, UpWork opened its first day of trading on the NASDAQ with shares more than 50% up. Initially listed at $15 per share (following an expected $12-$14 PPS) the contractor hiring portal’s shares opened at nearly $23 PPS Wednesday morning but closed slightly down at $21. Upwork listed with 12.5 million shares at a $1.5 billion valuation, raising $187 million on its first day.
New in e-commerce business listings this week we have a $316K print-on-demand apparel & memorabilia store, with revenues growing at a 26% CAGR for the period 2016 to (e)2018, highly scalable business using design automation scripts to create tens of thousands of unique designs, diversified sales with income generated across Amazon FBA, Amazon Merch, Teespring and other platforms, 36,000 tier Amazon Merch account and branded website with growing traffic offering clear opportunity for expansion.
New in SaaS business listings this week we have a $165K B2B Conversion Rate Optimization Tool, with revenues growing at a c.13% CAGR for the period 2015 to (e)2018, feature-rich software with extensive functionality and a multitude of notable clients, steadily-growing user base with low MRR churn and high LTV and highly automated operations allowing for high margins and low owner involvement. If you are interested in either of the above businesses, please follow the link to request a prospectus.
In events news, FE had a great time sponsoring Business of Software this week in Boston. Thanks to everyone who came to Founder Thomas Smale’s Exit Planning workshop to learn more about building a valuable online business! Next week FE is sponsoring Rhodium Weekend in Las Vegas where Thomas will be hosting a client dinner for any FE clients in Las Vegas at 7pm October 12. Respond to this email to RSVP if you will be in the area!
Continue reading below for more on Slack’s plans for IPO, UpWork’s successful market open and the subscription opportunity in the blockchain market.
Listings
New
E-Commerce – Print-on-Demand Apparel & Memorabilia – $21K gross/mo
- Revenues growing at a 26% CAGR for the period 2016 to (e)2018
- Highly scalable business using design automation scripts to create tens of thousands of unique designs
- Diversified sales with income generated across Amazon FBA, Amazon Merch and Teespring, and other platforms
- 36,000 tier Amazon Merch account
- Branded website with growing traffic offering clear opportunity for expansion
Yearly net profit: $113,000
Asking price: $316,000
SaaS – B2B Conversion Rate Optimization Tool – $4K MRR
- Year-over-year growth, with revenues growing at a c.13% CAGR for the period 2015 to (e)2018
- Feature rich software with extensive functionality and a multitude of notable clients
- Steadily-growing user base with low MRR churn and high LTV
- Highly automated operations allowing for high margins and low owner involvement
Yearly net profit: $44,000
Asking price: $165,000
Sold
Affiliate – Gardening – $2.3K gross/mo
In The News…
Slack Prepares for 2019 IPO
After years of mildly preparing to go public, Slack is reportedly now actively preparing to file for an IPO likely in the first quarter of 2019, according to sources familiar with the matter.
Slack was last valued in 2017, when it received a valuation of $5.1 billion ahead of a funding round of $427 million in early 2018 led by Dragoneer Investment Group and General Atlantic. Now, ahead of an IPO, Slack anticipates a valuation of more than $7 billion, benchmarked to the most recent round of financing’s valuation of the company. Financing and IPO valuations do not always fall exactly in line, however; often setting share prices affects the ultimate fundraising amount of a company’s going public. While setting a PPS is a long way off, Slack would fall among the largest recent tech IPOs, including Snap Inc.’s listing in 2017 at a valuation reaching almost $24 billion. Earlier this year, Slack surpassed 8 million daily active users as well as 3 million paid users of the popular intra-office direct messaging tool.
Slack’s lifetime fundraising totals over $1 billion since it launched in 2013 at increasingly higher valuations.
Blockchain Predicted to be $7 billion Market
As blockchain’s popularity grows with enterprise customers, cloud providers are increasingly offering the service on a subscription model.
The main benefit of Blockchain-as-a-Service is it allows companies to encrypt information without having to build the infrastructure in-house or hire out developers. Companies like Amazon, Microsoft and Oracle are best positioned to take advantage of BaaS, according to an investor note from Bank of America Analyst Kash Rangan. Providers of the distributed ledger technology will increasingly see the opportunity to offer services over the cloud, and Bank of America’s Rangan estimated that only 2% of servers would need to act as blockchain nodes in order for the BaaS market to reach $7 billion. Amazon, Microsoft, Oracle, IBM, Salesforce, and VMware were listed as leading BaaS providers in the investor note, with additional emphasis on real-estate/mortgage companies whose online services are blockchain-based, such as Redfin, Zillow, and LendingTree, as prime beneficiaries of the market. Piggybacking on enterprises seeking to deploy distributed ledgers are the industry’s largest IT providers, who have initiated BaaS offerings to test the technology without the cost or risk associated with deploying blockchain in-house or hiring developers.
Bill Fearnley Jr., IDC’s research director for Worldwide Blockchain Strategies, stated, “The thing to be thinking about is that we’re still in the early innings of this blockchain wave. There are very few people with multiple years of deep, hands-on experience.”
Upwork Shares 50% Up on Day One of Trading
UpWork debuted on the NASDAQ this week with shares 50% up at market open.
Shares were initially priced at $15 PPS on Tuesday evening after being expected to fall between $12-to-$14. The IPO saw UpWork list close to 12.5 million shares for a total of $187 million raised at a $1.5 billion valuation. Well above the set PPS, UpWork stock opened Wednesday morning at $23 per share. CEO Stephane Kasriel stated the company’s mission is to “help companies find developers, designers, lawyers, accountants on a freelance basis throughout the country and globally.” Kasriel noted that a main challenge and growth opportunity is to communicate the USP of UpWork to companies looking to outsource work. Kasriel stated, “We spend a lot of time figuring out how we can convince more businesses to use Upwork,” on CNBC’s “Squawk Box,” shortly before the company’s debut on the stock market. Upwork was founded in 2014 when Elance and oDesk, two competitors in the contractor outsourcing space merged to build a platform for freelancers to easily find work. Kasriel stated that the aim of the IPO “is not about raising money” as they have “cash in the bank” and have not raised venture capital in recent years.
UpWork’s total revenue rose 285 (up to $107.4 million) in the first half of 2018 and reported net losses of $7.2 million.
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