Workplace messaging service Slack Technologies has confidentially filed with the SEC for a “proposed public listing of its Class A stock”, the company said in a statement Monday.
The announcement comes amid expectations that Slack could pursue an unorthodox Spotify-like direct listing that would see its shares traded on a major exchange but with no capital raised at that time.
The statement made no mention of an IPO.
Such a move would push back against the view of many in equity capital markets that Spotify’s direct listing last April - an explicit critique of the traditional IPO process - was a one-off.
A standard SEC review, notwithstanding any ongoing post-shutdown logjam, could see Slack shares trading publicly as early as late April or early May (the review process typically takes at least 80 days).
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Slack last week announced it now had more than 10m daily active users and 85,000 paid customers, the latter up more than 50% in the past year.
Last month, it unveiled a new logo and replaced its chief product officer.
In December, it appointed former Salesforce CFO Graham Smith as its third independent board director.
In August, Dragoneer Investment and General Atlantic led a Series H financing round that raised US$427m to give the company a post-money valuation of more than US$7.1bn.
A traditional IPO would probably have allowed Slack to raise in the order of about US$1bn (up to 15% of its valuation), but the company may be uninterested in taking an IPO discount at this time or diluting existing shareholders.
Reuters reported in December that Slack had tapped Goldman Sachs to lead an IPO, though a direct listing would mean no underwriting fees and limit the bank’s fee take to advisory services.
Goldman also acted as Spotify’s lead financial adviser.
Spotify, the popular music streaming service, said it chose a direct listing because it believed it was more transparent than an IPO and would provide equal access to both buyers and sellers.
Barry McCarthy, Spotify’s CFO, later wrote in a Financial Times op-ed that the US IPO market was “broken”.
Raising money from an IPO was an entirely tactical decision and should be weighed against private and public alternatives, many of which were considerably less expensive than an IPO, McCarthy wrote in the August op-ed.
“If you want to take your company public, that is a different question - one that should not solely be about raising capital.
“There is no reason that going public has to be part of a company’s decision about how to finance its growth.”
Hosting service Airbnb is also reportedly toying with taking the direct listing path, though there appears to be some doubt about whether its shares will list this year or next year.
Spotify, meanwhile, is scheduled to report its fourth quarter numbers before the opening bell on Wednesday.
