Now this is what you call late-stage financing.
Shortly after Light Street Capital had its first close in mid-January of Light Street Beacon I, a private late-stage growth equity fund, the firm said it funded two deals, Slack Technologies and Pinterest. Sure enough, three months later, Pinterest has already gone public and Slack on Friday filed for an initial public offering.
Slack, an enterprise collaboration software company, is the latest unicorn to file plans with regulators for an IPO. The company plans to do a direct listing, meaning it is not being underwritten by an investment bank. This is similar to how streaming giant Spotify went public last April, with all of its private shares immediately became public, unlike in a traditional IPO.
Light Street declined to comment.
In its fourth-quarter client letter obtained by Institutional Investor, the hedge fund firm said its investment in Slack included “a significant co-investment opportunity.”
It is not known which other hedge funds, if any, own a stake in Slack. We just know that, according to its S-1 filing, no hedge fund owns at least 5 percent of the company.
Japan’s SoftBank Group Corp. owns a huge stake. And last year Tiger Global Management disclosed a more than $1 billion investment in SoftBank. So, Tiger owns Slack indirectly.
In its regulatory filing, Slack did not indicate how many shares it plans to sell in the IPO or the price it hopes to fetch.
The company says in the filing that prices in private transactions during the year ended January 31 ranged from $8.37 to $23.41. Of course, in the filing Slack includes this caveat: “Our recent trading prices in private transactions may have little or no relation to the opening public price of our shares.”
CB Insights says Slack’s most recent valuation is $7.1 billion.
In the 12 months through January, Slack reported about $400 million in revenues, nearly double the roughly $220 million it reported for the previous year and quadruple the revenue in fiscal 2017, according to the regulatory filing.
It also reported a $154.2 million loss from operations, wider than the nearly $144 million loss the year before.
The filing says Slack has 88,000 paid customers.
Meanwhile, on April 25, Light Street filed a 13G with the Securities and Exchange Commission indicating it owns 5.5 percent of the shares of Pinterest. This is basically a case of converting its private shares to a public filing. So far the IPO has worked out very well for Light Street and Pinterest’s other investors.
Pinterest’s IPO was priced at $19 a share, above its anticipated range of $15 to $17. The stock closed Friday at $29.85.
Meanwhile, on Friday, Uber Technologies said in an updated regulatory filing it plans to sell 180 million shares for between $44 and $50 each in its IPO. This would raise between $7.9 billion and $9 billion. Uber said existing stockholders are selling 27 million of the shares in the offering.
Uber also disclosed it entered into an agreement with PayPal, which will purchase $500 million of Uber common stock in a private placement at a price per share equal to the IPO offering price, according to the filing.
Light Street is among the hedge fund firms that have an investment in Uber, either through their hedge funds or private equity vehicles. The others are Tiger Global Management, Lone Pine Capital, Glade Brook Capital Partners, Valiant Capital Partners and Coatue Management.
Light Street is also among several hedge fund firms that had investments in Lyft when it recently went public. The other firms were Coatue Management, Third Point, Glade Brook and Senator Investment Group.
