Workplace chat app Slack readies for $17bn public debut in New York

Workplace chat app Slack will list in New York on Thursday with a valuation of as much as $17bn (£13.5bn), becoming the latest in stream of US technology giants charging to join the markets.

The company, which provides messaging tools for the workplace, will be pursuing a direct listing, which will mean it is not issuing new shares to raise funds but instead will be making it possible for existing shareholders to sell their stock.

It is one of the few US tech companies to pursue such a path, coming after Spotify carried out a direct listing in April of last year.

Software company Afiniti, which recently added David Cameron to its advisory board, has also tabled plans for a direct listing in future. Most companies, though, opt for a public offering, which allows them to raise cash as by offering new stock.

Slack is joining the markets around six years after it was founded by four computer scientists. One of those was Stewart Butterfield, who now serves as Slack's chief executive and who previously founded Flickr, the photo-sharing service which was sold to Yahoo for more than $20m in 2005.

The move to take his latest business, Slack, public comes as a flurry of other Silicon Valley giants pursue listings.

Just over a month ago, Uber pulled off the largest tech flotation in five years, and well-known names such as Pinterest and Lyft have also recently made their debuts. Trading platform Robinhood and co-working office provider WeWork are expected to follow.

According to data from Dealogic, this could be one of the biggest ever IPO seasons for US markets in terms of the amount of cash raised. The year-to-date has seen $34.5bn raised in IPOs – the largest sum since the same period in 2000.

Although Slack will not be raising cash, the public listing will see its valuation surge, hitting anywhere between $16bn and $17bn. It was last valued at just $7.1bn during its most recent funding round in August.

The lift to its market capitalisation comes despite the company still being unable to make a profit, having been loss-making for three years. For the three months to the end of April, Slack said its loss had widened to $33.3m, a 34pc jump year on year, even as its revenue was up by more than two thirds.

In recent filings to the US Securities and Exchange Commission, Slack admitted that it was expecting losses to continue for the foreseeable future, and that expenses may continue to rise at such a pace it "may not achieve or maintain profitability in the future".