Slack rides high on early valuations

Slack rides high on early valuations

The team messaging site now boasts 1.1 million daily active users

April Underwood, Slack's new head of platform.

April Underwood, Slack's new head of platform.

Slack is one of those rare startups that seem to defy the odds at just about every turn.

Not long after the company joined the storied "unicorn club" last year, its valuation rose to $2.8 billion. This week, numerous new milestones attest to its continuing growth.

Now well-known among enterprises for its namesake team-communication software -- said by some to replace email -- Slack on Wednesday announced several new testaments to its growth and an important new hire. Specifically, it has surpassed 1.1 million daily active users and $25 million in annual recurring revenue; moreover, it has hired Google, Twitter, Intel and Travelocity veteran April Underwood as its new head of platform.

"Slack's growth in terms of its number of seats and conversions from free to paying customers has certainly been remarkable," said T.J. Keitt, a senior analyst with Forrester Research.

Launched in 2014, Slack's enterprise Software as a Service (SaaS) offers real-time messaging, archiving and search; the company's commonly articulated goal is to outdo email as the primary tool for team communication. There's a free lite version of its software as well as a fully featured version starting at $6.67 per user per month.

Slack's API ecosystem is a core part of its increasing popularity, the company says, and teams using Slack have set up more than 900,000 integrations.

Still, "from a business model perspective, they haven't done anything that other freemium-oriented SaaS vendors haven't done," Keitt said.

Slack also faces significant competition from contenders such as HipChat and Yammer.

However, the company essentially happened on a problem and offered a compelling solution, Keitt added. More specifically, Slack can help organizations that lack institutional memory because of opaque internal communications. "That was acutely felt by a large number of information workers," he explained.

In many respects, Slack's success is analogous to Dropbox's. "They elegantly solved a problem," Keitt said. "I think Slack will have staying power, much as Dropbox or Box."

As head of platform, meanwhile, Underwood will oversee platform products, partnerships, API integrations and developer relations.

Looking ahead over the coming year, the company plans to invest in new integrations, platform capabilities and partnerships, it said.

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