Slack’s slowing growth turns around as remote work booms
Hello and welcome back to our regular morning look at private companies, public markets and the gray space in between.
This morning we’re taking a look at Slack’s customer growth in the current moment compared to what we know about it historically. What we’d like to know is whether Slack’s current boom in customer growth is unprecedented for its business or if the company is merely returning to prior levels of logo growth.
As with any modern software (SaaS) business, Slack’s revenue growth doesn’t only come from net-new customer adds; Slack also grows its top line by selling more of its service to folks who already have a paid account. Think of it like this: Slack can add revenue by selling new customer Alex And Friends Ltd. a ten seat license or it can add revenue by selling Alex Actually Has No Friends Inc. another 5,000 seats to its existing account. We’re looking at the first case today.
Recently Slack CEO Stewart Butterfield updated the world on its his company’s reported growth. Slack told the world via an SEC filing that it had added 7,000 net new customers in its current quarter, ahead of the preceding few quarters in which it had added around 5,000. Last night, in a thread worth reading if you want to better understand what it’s like to run a company in chaotic times, Butterfield noted that the figure had risen to 9,000.
Of course, we’re only seeing part of Slack’s accelerated growth in light of the remote work push being made in the face of rising COVID-19 infections; Slack is also selling more of its service to existing customers, per the CEO. But let’s go find what we can about these net customer adds and see if Slack is setting new records or just getting its groove back. At the end, we’ll tie this all back to the growth in demand that remote work startups have seen in recent weeks.