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Abu Dhabi, UAEMonday 17 December 2018

Slack the latest recipient of Softbank Vision Fund largesse

Saudi's Public Investment Fund and Abu Dhabi's Mubadala largest investors in $100 billion tech fund

Slack has raised $250 million to fend off competition from Microsoft and others. Thomas White / Reuters
Slack has raised $250 million to fend off competition from Microsoft and others. Thomas White / Reuters

SoftBank’s Vision Fund, whose backers include Abu Dhabi’s Mubadala Investment Company and Saudi Arabia’s Public Investment Fund (PIF), announced an investment in Slack, a workplace communications platform, to help it fend off competition and expand internationally.

The U$100 billion fund led Slack’s $250 million series G funding round, with US venture capital firm Accel the second largest participant, taking Slack’s total existing funding to $540m. The round raises the messaging firm’s valuation to $5.1bn.

Slack will use the funds to defend its position in the rapidly evolving business communications sector, enabling it to “move quickly as the business and market evolves, particularly around international expansion,” the fund said on Monday.

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“The Vision Fund’s focus on global technology platforms aligns with our recent international expansion, while Accel has been with us as investors and partners from the very beginning,” said Slack chief executive Stewart Butterfield.

The company this month added French, German and Spanish language capabilities to its platform, with Japanese to come by the end of the year.

Mr Butterfield told Bloomberg that the additional funds will help give large clients the reassurance that Slack has staying power in a competitive market.

“We have a lot of large customers,” he said, “and the bigger ones are a lot more conservative. As they move tens of thousands of people over to Slack they want to make sure we're going to be around.”

Japan’s Softbank in December announced the creation of the $100bn Vision Fund in collaboration with Saudi Arabia’s PIF for investments in the technology sector. The PIF’s participation of the fund is part of Saudi Arabia’s strategy to diversify its economy away from its dependence on oil revenues.

Mubadala announced a $15bn commitment to the fund in May.

The Vision Fund in August unveiled a $4.4bn investment in enterprise networking company WeWork, in conjunction with Softbank, and is considering a $12bn investment in Uber Technologies along with three other investors, according to Bloomberg.