Slack Technologies Inc., a startup with roots in Vancouver co-founded by Canadian Stewart Butterfield, raised $120-million in a round of financing, valuing the company at $1.12-billion (U.S.).
Slack, which makes software for people to collaborate at work, received funding led by Kleiner Perkins Caufield & Byers and Google Ventures.
Mr. Butterfield, Slack's chief executive, previously sold photo-sharing website Flickr to Yahoo Inc. in 2005. In 2009, Mr. Butterfield co-founded Tiny Speck Inc. and raised $17-million to develop an online game called Glitch.
"When we started the company there were two of us in Vancouver – we were remote from the very beginning," says Mr. Butterfield, who was born in British Columbia and went to the University of Victoria and Cambridge University. Other staff were in San Francisco and beyond. Like Twitter, which was the side-project to another company called Odeo, the core features of Slack were built as a side project to manage the far-flung Tiny Speck team.
Tiny Speck had $5-million left when Mr. Butterfield and the founders decided to shut down the game and return cash to stakeholders. Instead, their investors encouraged them to keep the money and start a new business, which became Slack.
With the latest funding, Slack's valuation puts the San Francisco-based company in league with other startups that are being valued at more than $1-billion. Fourteen U.S. technology companies reached a valuation of at least $1-billion in the first half of the year, more than double the number of startups that did so in all of 2013, according to venture capital and angel investment database CB Insights. Other startups such as Airbnb Inc., Snapchat Inc. and Uber Technologies Inc. have been valued at $10-billion or more.
"The best time to raise money is when you don't need it," says Mr. Butterfield, who says the company is on the lookout for smart acquisitions and plans to grow the team from 63 employees to more than 200 by the end of 2015.
With files from The Globe and Mail reporter Shane Dingman