Slack raises $200 million in financing

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Slack has raised $200 million in venture capital financing, boosting its valuation to $3.8 billion, the messaging software startup said on Friday.

The latest funding round comes in spite of a contraction in venture capital investing for technology startups, amid widespread concern about high valuations. The market rout among tech stocks earlier this year caused some venture capitalists to further tighten their purse strings.

Late-stage investments – Series D or later – dropped 71 percent in February from a year earlier, according to venture capital database PitchBook.

Slack’s $200 million round is its largest yet, the latest sign that some companies are still able to attract wary investors, many of which are flush with cash. In another instance, Snapchat, the ephemeral messaging app, raised $175 million last month.

Investors boosted the Slack’s valuation by $1 billion, up from $2.8 billion a year ago.

The latest funding, which brings Slack’s total venture financing to $540 million, was reported in recent weeks by multiple news outlets. Slack on Friday confirmed the round, which was led by Thrive Capital and included GGV Capital and Comcast Ventures, as well as existing investors.

San Francisco-based Slack makes messaging software for businesses, designed to help teams collaborate and communicate more effectively. The company says it has 2.7 million daily active users, although many of them access the free version of the software. About 800,000 are paid users.

Slack’s customers include media companies such as CBS and BuzzFeed, tech companies such as Samsung Electronics Co Ltd and Salesforce Inc, retailers, universities and the U.S. government.

(Reporting by Heather Somerville; Editing by Lisa Von Ahn)