Slack, the red-hot startup worth $2.8 billion, just launched its own VC fund and app store
SlackSlack CEO Stewart ButterfieldIn less than two years, Slack turned itself into a massively popular business messaging app worth $2.8 billion.
Now, Slack wants to be more than just a work messaging app.
It wants to be a broader platform that grows its software into a central hub for all work communications.
It also wants to be an investor.
On Tuesday, the two-year old startup launched a new $80 million VC fund that will primarily invest in startups building apps on top of Slack, and an app store called App Directory where users can download third party apps that integrate with Slack.
"We really want to encourage all kinds of different applications on our platform," Slack CEO Stewart Butterfield told Business Insider. "We've worked with a number of big companies to do integrations, but we're also investing in really cool little things starting up."
The new fund is backed by Slack with additional capital coming from its partners, including Accel, Andreessen Horowitz, Index Ventures, Kleiner Perkins, Spark, and Social Capital. It will primarily make investments worth $100,000 to $250,000 in seed stage startups that make Slack their core foundation.
That means you'll see more apps like Howdy, an app that runs status update meetings for teams through Slack's built-in bot, which automatically collects feedback.
April Underwood, Slack's head of platform, told us it's already made three investments out of the new fund, including Howdy, and that it will make investments regularly throughout the year.
"We think there's a real opportunity for these companies to build a sustainable business on top of our platform," Underwood said.
The App Directory is launching with 150 different apps that integrate with Slack's platform, including Dropbox, Google Drive, and Twitter. There will also be lesser known apps, like Blockspring, which makes it easy to pull in data from outside sources and answer questions right within a Slack chat window. A lot of these apps will have a conversational UI, taking advantage of Slack's communication-based design.
"There's so much to explore by offering capital and support to these companies, and we'll see more of it, which means we'll see more apps on the platform, and our customers will get more value out of Slack," Butterfield said.
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Textbook enterprise play
Slack's move to launch its own app directory is a textbook play that many enterprise software companies follow.
Salesforce, for example, has a huge app marketplace called AppExchange, where Salesforce users can download third-party apps that can be used right within the Salesforce platform. Some of those apps are only available on Salesforce, but they're still able to build a sustainable business because Salesforce has such a huge userbase.
Smaller players like Box, Zendesk, and Atlassian all have their own app marketplaces, too.
By offering app marketplaces, these platforms become a central destination for business workers, making their products more valuable (and keeping customers using them longer, rather than switching to different services). Butterfield conveyed a similar idea, saying, "If we can make our customers' use of their existing tools even better because they use Slack, then that's a huge win."
Launching a corporate VC is also a common tactic among large enterprise players, although you rarely see it from a company of Slack's size. Salesforce has become one of the most active VC firms lately, while Cisco and Intel also have sizable investment arms. It lets the companies to work closely with startups, and often leads to acquisitions too.
The bigger trend: ChatOps
From a more technical perspective, Slack's new platform ties into a growing trend called "ChatOps," where companies are increasingly combining every day apps with chat programs.
In a nutshell, what "ChatOps" does is allowing users to access third party app content right within the chat programs, bypassing the need to open up another app to see it.
For example, Slack has made it possible to call a Lyft cab directly within its app using its popular "slash commands," while Slack rival HipChat just announced an Uber integration that lets you call a cab without having to leave the chat app.
"Imagine every software tool that you needed to use, their notifications, it just came in through Slack," Underwood said. "That's part of the reason teams have fallen in love with Slack."
But the overarching goal is to continue to expand its user base, and Slack seems to be doing well on that front too. It now has 2 million daily active users, and 570,000 paid members. Just two months ago, it said it had 1.7 million daily active users and 470,000 paid users. It's why Butterfield wants to see more Slack-integrated apps.
"People spend hours on Slack," Butterfield said. "You tend to have Slack open at work, so that's the perfect place to have these other apps available and these integrations to be happening because you're already looking at it."