Slack Technologies, the popular workplace messaging platform, has confidentially filed for its initial public offering on Monday.
A confidential filing allows companies to keep most of its correspondence with the SEC under wraps until it decides to go public. It also allows the company to file less paperwork and submit only two years of financial data, compared to the three years for most filings.
The San Francisco-based company is expected to pursue a direct listing, according to The Wall Street Journal last month. The rare move would likely make the popular workplace messaging platform, valued at $7.1 billion, the second-biggest direct listing ever from a tech firm. Spotify, which chose a direct listing for its own debut on the New York Stock Exchange last year, ended its first day valued at $26.6 billion.
“Slack Technologies, Inc. today announced that it has confidentially submitted a draft registration statement on Form S-1 with the Securities and Exchange Commission (the “SEC”) relating to the proposed public listing of its Class A common stock,” said the company in a press release on Monday. “The public listing is expected to take place after the SEC completes its review process, subject to market and other conditions.”
A direct listing allows a company to skip the major underwriting fees that go along with an IPO. It also adds a layer of intrigue since Slack shareholders would be able to trade their shares immediately, without a lockup period that usually bars investors from offloading their shares before a certain date.
The company, which offers free and paid communications services, has 8 million daily active users, including 3 million paying customers. It teases partnerships with several companies on its website, including Salesforce, Dropbox and the Los Angeles Times.
A typical IPO pegs a certain amount of shares for the underwriter to sell at a prearranged price — but without it, investors would have to wait for Slack’s first day of trading to see how many shares are available and for what price.
Slack has raised about $1.2 billion since it launched in August 2013, including a $427 million round of funding led by Dragoneer Investment Group and General Atlantic. The company’s founder, Stewart Butterfield, is currently its chief executive.
The SEC review process for Slack’s IPO should take the usual three to four months, meaning the company is on track for a second-quarter debut on Wall Street.