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The figure is up sharply from its last announced number, 13 million DAUs this July. Seeing Teams grow to 20 million daily actives so quickly is notable, as 54 percent daily active user growth in less than half a year is pretty darn rapid. Slack, in contrast, grew its DAU count by 37 percent in a year, according to its last data release.

Slack, a recently public company that debuted via a direct listing, announced in October. While it would be simple to declare Microsoft the runaway winner in terms of active seats of its internal chat product, Slack unsurprisingly disagrees.

When announcing its 12 million DAU figure, Slack had a few things to say that underscore its views regarding what counts as an active user. Here’s a condensed set of quotations:

DAUs get cited a lot, but what, really, is their significance? In our book, the 鈥淯鈥� is what matters: Use! Engagement is what makes Slack work 鈥� you can鈥檛 transform a workplace if people aren鈥檛 actually using the product. […] It鈥檚 Not a Successful Collaboration Tool if People Don鈥檛 Use It […] Deep and sustained levels of engagement across companies are what keep people adopting Slack and using it above other, less connected ways of working.

Slack went on to publicly define a daily active user, saying that it counted people who have “either created or consumed content in Slack within a given 24-hour period on either a free or paid subscription plan.” That seems pretty fair.

Regardless, the Slack narrative that its DAUs are more A than Microsoft’s DAUs was a little bit stronger when their aggregate figures were closer; now that the gap has grown larger, and it appears that Teams is accreting users even more quickly than before, we really have a scrap on our hands.

What About Startups?

We focus on private companies here at SA国际传媒 News, but we do allow ourselves a little wiggle room when it comes to companies we covered while private go public; how can we not cover recent graduates?

But this particular story is a bit more than that. We’ve covered Slack vs. Teams since the very first days of this publication’s life, making it something we cannot quite let go of. And, finally, Slack’s falling share price after its direct listing has become a critical piece of information that may inform how private companies choose to go public in the future. Summing, Slack’s a company we’ll keep writing about for a while, and not just for the sake of nostalgia. Its performance as a public company could set the tone for future direct listings, so we must pay attention.

More when Slack inevitably responds.

Illustration: .

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But while the tech press has been busy unpacking what a direct listing is, how it differs from an IPO, and other bits of grit from the public markets, Slack’s competitors have been busy raising and selling. Let’s take a look at a recent round and a new data point to understand how the companies and products with Slack on their radar are performing.

Slack vs. Microsoft vs. Mattermost

, a Slack competitor and Y Combinator-backed company, . That capital came just months after the firm raised . Combined, the two rounds total $70 million. Mattermost raised a , but we don’t how large that transaction was.

Raising two rounds in such rapid succession鈥攎ere months apart鈥攆or such large and growing amounts indicates that Mattermost is resonating with the market.

And second, has news out today regarding the number of daily and weekly active users that its Teams product currently sports. Teams is a Slack comp that lives inside of the Office 365 world; Office 365 is Microsoft’s SaaS product.

As such, Teams has had fertile ground to grow in. And grow it has. According to Microsoft, Teams now has 13 million daily active users and 19 million monthly active users. Is that a lot of folks? Slack hasn’t updated its DAU number since it noted that it had 10 million as of “the three months ended January 31, 2019” when it said that its tally “exceeded” the 10 million mark .

(More on Teams versus Slack here, and here.)

Fair enough, but that figure is now quite out of date, and given that Microsoft now has the higher聽补苍苍辞耻苍肠别诲听number, it could be that Slack will drop a new data point. Investors will certainly want to know how it stacks up against Microsoft’s growing score when earnings roll around again.

A Large, Growing Market

What matters more than whether Teams or Slack has the most DAUs is that the market for internal messaging tools is proving to be enormous. If there’s space for Slack, Teams, and Mattermost to all grow, there’s lots of addressable market to count up and go after.

(Mattermost is an open source product, which does set it in a slightly different space compared to the proprietary Slack and Teams services.)

Microsoft told SA国际传媒 News in a call that it is targeting frontline workers, a large chunk of the global workforce. Slack has a historically strong hold on tech shops and startups. Mattermost will have to find its own niche or try to take on its larger competitors.

We’ve tracked Slack vs. Teams since I can recall. What’s more fun now is that Slack is public, which means we’ll have a better look at its financial performance as the news continues. And with Mattermost raising tons of cash and going after Stewart and Microsoft, there is a new upstart to track.

This entire narrative has been an illustration of the startup circle of life: Slack started life as Tiny Speck, pivoted, nearly got sold to Microsoft and Amazon, stayed solo, attracted competing products from companies big and small, went public, and is now the incumbent itself.

Illustration: .

SA国际传媒 News focuses on startups, and we nearly never write about product. Let’s break both rules this morning.

Microsoft a number of updates to its Teams product today. Teams is Microsoft’s Slack cognate, a piece of its larger Office 365 puzzle. In Microsoft’s view, companies need two ways to communicate: Teams for small-group chat, and Yammer for company-wide comms.

Maybe! But what matters is that after with that Microsoft-Slack deal, Slack is heading towards an IPO after becoming one of Silicon Valley most remarkable companies (its stand-out metrics: brand, and revenue growth). And Microsoft is building out Teams as quickly as it can to fend off a nimble competitor that is threatening the flank of one of its , its productivity stack.

So, what did announce today? I spent some time on the phone with Microsoft corporate vice president (CVP) 1 , who has been at Microsoft for a decade and a half, to discuss the changes.

Microsoft wants to make Teams a product that works for mobile, “frontline” workers. Think airline staff, retail workers, and the like. The new stuff that Microsoft built for Teams is designed to meet the needs of those workers. Features like shift support, and audio messaging.

What matters in the news isn’t the individual features (), but the idea that Microsoft wants to target a far-larger set of employees than just desk-oriented staff to use Teams is interesting. The idea,聽if successful, increases the potential pool of paying seats than I would have guessed that Teams, or , could go after.

Perhaps the total addressable market (TAM) for Slack-like apps is larger than we thought. That could work out well for both Slack and Teams (perhaps there is enough market room for both to succeed), but also seems to put Microsoft ahead in the market that exists聽outside the tech sector, where it has a larger brand. If so, Microsoft could steal a march on a large slice of TAM.

The moves from Microsoft come on the heels of the firm was touted that claimed that Teams was besting Slack in usage. Not in San Francisco, at least that I have seen. But I live in two bubbles (tech’s, and an Ivy town), so I can’t really comment.

For Slack, , increased competition could mean slower growth, anathema for a company as well-funded as itself, and with as large a valuation to live up to as Stewart Butterfield’s staff and investors expect.

It’s going to be a super exciting year.

Software giant bought , a Texas-based dev shop, it today. The Redmond-based company has now made , according to SA国际传媒.

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The XOXCO deal, therefore, is just one among many. And it’s not the largest, given that Microsoft spent billions earlier this year for . The terms of the XOXCO deal were not shared, which nearly always means that the transaction in question was small.

But the size of the deal isn’t so important. (For reference, XOXCO during its life as a private company.) What does matter is what XOXCO is currently known for, and what it may do for Microsoft.

Bringing back to mind our prior work on Microsoft’s work to limit Slack’s incursion into its productivity goldmine, observe the 聽report on the recent acquisition:

“Among [XOXCO’s] products are聽, which Microsoft describes as ‘the first commercially available bot for Slack that helps schedule meetings.’ Howdy assists with the creation of custom bots, including bots for work chat, bots for customer support and bots for marketing. XOXCO also sells Botkit, a collection of development tools for those working on GitHub. Microsoft has partnered with XOXCO for a number of years.”

This deal, therefore, could work in two directions. First, it could limit new, useful products being built for , a well-capitalized company that is gunning for a larger share of the productivity market. And, Microsoft could bring the new talent into its own work to combat Slack (its Teams product, mostly). Either way, the deals seems聽like a reasonable move by Microsoft, though one that underscores the possible risk that Slack poses to the older company.

The recent pace of Microsoft’s acquisitions.

The deal is also a win (of sorts) for the Austin startup scene, which we’ve聽covered once or twice. XOXCO’s exit makes our focus on the area seem even more valid than usual.

Top Image Credit: .

TechCrunch’s and reported that workplace collaboration tool is back at the funding well, this time hunting for $400 million at a $7 billion valuation. A year ago,聽Slack raised $250 million at a roughly $5 billion valuation, bringing its total capital raised to around $790 million at the time.

Another $400 million would put Slack over the $1 billion raised threshold. And with a valuation of $7 billion, Slack would push higher into the upper crust of global unicorns.

The possible new round raises two questions: why is Slack raising again, and is the company worth $7 billion?

Why Raise Now?

The company is likely raising now because it can access the capital. Markets are hot, mega-rounds are in vogue, and Slack is a badge that anyone would want in their portfolio. And while I doubt Slack will struggle to find $400 million, the firm will have a harder time getting the same stack of money in a year’s time if market conditions deteriorate.

Getting cash while the market is willing to charge you a minimum for it is intelligent. And with competitors far from quashed, Slack may need an infusion to build out its own service while fending off rivals hungry for its rapidly expanding recurring revenue.

On the competitive front, Slack may have neutered Atlatssian’s聽potential rival to its platform, but that doesn’t mean that or products have been dealt with. DingTalk is said to be the , and Microsoft is investing in Teams heavily, including releasing a .

And while Slack is well capitalized, Alibaba and Microsoft are capital made flesh.

Finally, Microsoft as an Office competitor in an SEC filing. From that we can presume that Redmond is hellbent .

Why $7 Billion?

SA国际传媒 News previously took a look at Slack’s paid seat count and reported ARR figures to figure out how much revenue the technology company pulls in from each of its users.

In September of 2017, Slack had 2 million paid seats and ARR of around $200 million. In May of 2018, the firm noted it had reached the 3 million paid seats, but declined to detail its then-current ARR. Using other public and reported data () we estimated with moderate confidence that Slack was likely around the $300 million ARR mark early this summer.

It took Slack from September to May to add 1 million paid seats. It seems unlikely that Slack has added another million between May and August. As such, Slack’s ARR is probably under the $400 million mark today.

If we presume that Slack has reached the $350 million ARR threshold, a $7 billion valuation would value Slack at 20 times its current annual recurring revenue.

That sounds high until you realize that Slack is accreting ARR at a silly clip, pushing that multiple quickly down. Investors are willing to pay for growth today, so why not park your capital in a company that only grows? It just makes sense from the current investor perspective.

Slack will need to grow into its $7 billion valuation, but that’s fine. The company will have the capital to do so.