As you may of heard, Slack just raised a $200M round of financing at a $3.8B valuation.
Per the first image below, they have 800K paying users.
If you look further down at the second image, you can see how much they charge paying users, between $6.67 per month or $15 per month.
Assuming all their 800K paying users are at the lower tier of $6.67 per month, they are at $64M in annual recurring revenue ($6.67 x 12 months x 800K). If they were a public company at this revenue, they would be trading at a 60x revenue multiple ($3.8B/$64M).
If their 800K paying users were at the high tier of $15 per month, they are at $144M in annual recurring revenue and 26x revenue multiple ($3.8B/$144M).
Realistically, their users are paying somewhere in the middle of $6.67 and $15, so splitting the difference of 60x and 26x multiple, they would need to trade at a 42x multiple.
Taking a look at the Bessemer Cloud Index, you can see that the largest multiple of public saas companies is Workday, trading at a 10x revenue multiple. So assuming the best case scenario, Slack is getting paying users at the upper tier of $15/month, the 26x revenue multiple is much bigger than Workday’s. That being said and a major implication to their current valuation, they are growing at a much faster pace than Workday or any other company in the Cloud Index.
If you look at the valuation of companies in the Cloud Index, fourth image below, only 9 companies have a higher valuation than Slack’s $3.8B.
Given Slack’s revenue and growth rate, they could IPO today, but the big question is what their market capitalization could be.