Armed with a cash war-chest, Slack (WORK) co-founder and CEO Stewart Butterfield has begun to pull the trigger on positioning the company even more at the forefront of work-from-home technology.
Slack announced its sixth acquisition on Wednesday, scooping up four-year-old company directory startup Rimeto. Terms of the transaction weren’t disclosed. The company was founded by two former Facebook video executives and the founder of the Zagat Survey (which was sold to Google in 2011).
Rimeto fits in with Butterfield’s efforts to develop technology (or in this case, acquire it) that helps employees to understand and communicate with co-workers better. The startup offers an enterprise-wide, searchable directory that automatically integrates information company-wide. Think of it as a modern day Rolodex for co-workers, on steroids.
Useful stuff in this work-from-home world, which is unlikely going away anytime soon — if at all for some companies.
Butterfield tells Yahoo Finance “hundreds of thousands” of people are using Rimeto.
“This is an amazing product to be offering to the broad world. Also just strategically, I think it's interesting for us to get a toehold in customers that aren't yet Slack users,” Butterfield told us via a Zoom call.
The buying spree may just be getting started for Slack, despite valuations on software-as-a-service companies being elevated right now.
Slack raised $862.5 million in cash via a convertible debt offering on April 9. The company ended its fiscal first quarter ended April 30 with an impressive $1.5 billion in cash and equivalents and marketable securities.
It’s not as if Slack needs all that cash — the company is virtually debt-free (excluding the aforementioned debt offering) and is not a capital intensive business. So why not try to build out the product suite in a bid to attract larger enterprise deals.
“We haven't been big buyers, we've just been growing so quickly and there's just so much going on that we've only recently reached the point of maturity where we can handle the integration,” Butterfield explained on the acquisition front. “We want to be a lot more aggressive. Obviously valuations are high across the board. And now that we're in the better position, we have 120,000 customers, it makes more sense to us as an avenue for distribution but also just to kind of accelerate the roadmap because there's so much that we're working on that we think is really important.”