All posts in “slack”

Symphony, a messaging app that’s been a hit with Wall Street, raises $165M at a $1.4B valuation

Slack’s rapid rise and upcoming IPO are clear signs of the ripe opportunity to be had in the field of enterprise messaging. Today, a startup that’s built a messaging product specifically for the financial services vertical is also proving that out. Symphony, which offers secure messaging and other collaboration tools for bankers and those who work with them, is today announcing that it has raised $165 million. With this round, Symphony’s valuation now tops $1.4 billion.

The funding comes from Standard Chartered and MUFG Innovation Partners (a division of Mitsubishi that makes fintech investments), and also included other (unnamed) current and new investors. Symphony has now raised a very hefty $460 million, with previous backers including Google, Lakestar, Natixis, Societe Generale, UBS, Merus Capital and BNP Paribas, along with a consortium of 14 of the world’s largest investment banks and money managers, including Bank of America, BlackRock, Citibank, Deutsche Bank, Goldman Sachs, HSBC, and JP Morgan.

Notably, its financial backers are all strategic investors in the company: they use Symphony both for internal collaboration as well a channel to communicate with outside partners and integrate data from across their networks in a secure and compliant way.

And before you consider Symphony’s expansion into new products and plans for the funding — more on those below — that usage has been on an upward trajectory. With an expanded presence outside of its home market of the US into Europe and Asia, the company now has 425,000 users across some 400 companies using its mobile and desktop apps for messaging, voice and video conversations, and more. As a point of comparison, when the company last raised money, in 2017, it had 200,000 paying customers. 

Even given that rapid take up of messaging, and of Symphony in particular, the size of this round came by surprise. In an interview earlier, David Gurlé, Symphony’s founder and CEO, said the original intention was to raise a more modest $50 million – $75 million. It appears that when your primary customers are also investors, things can ramp up quickly.

The funding will be used to continue growing the platform’s functionality, both organically and by way of acquisitions. In terms of the latter, areas where Gurlé believes Symphony would be better off buying rather than building itself include market intelligence and IT integration (indeed, there are a number of players in both areas and so consolidation may well be on the cards).

In terms of breaking new ground on its own, Gurlé said that a lot of it is dictated by Symphony’s customers. “A year ago, customers started approaching us looking for workflow automation tools,” he said, “and that was the beginning of a new chapter for us.”

That came in the form of a new product called Symphony Market Solutions, with many of the companies now adopting its product doing so in the context of “digital transformation” agendas — bringing their IT infrastructure and what it’s there to serve up to speed with modern developments.

For banks and others in the financial services industry, this is a notable development: more than any other vertical, except tech itself of course, financial giants have long been recruiters and builders of their own innovative IT services. That was in part because that is what necessity dictated: with tens of billions of dollars at stake, proprietary trading software built to do something better than your rivals can could give you a distinct advance. And part practicality: it can help you keep a better security and audit trail for what passes through that product.

Fast forward to today, and banks are cutting costs like everyone else, and they are also suffering from the brain drain that has hit many other verticals: big technology companies, and the lure of building a potentially lucrative startup, have become magnets for many of the greatest technical minds.

That has resulted in an interesting emergence of companies that are building products for these companies, knowing specifically what they need, and they’re getting more face time and consideration by buyers than ever before. Symphony is not the only one; BlueVoyant — which also recently raised funding — has also developed a similar proposition specifically in the area of security.

In terms of what else is coming on the horizon and Gurlé noted that the majority of traffic on Symphony today is related to internal communications, with a healthy proportion of that not between humans but humans and chatbots — there are now 1,000 on the platform — that they query to update or gather information.

“Symphony has generated tremendous interest for revolutionising buy-side and sell-side secure messaging and collaboration in global markets, both in content curation and consumption as well as the workflow across the whole deal life-cycle,” said Yann Gerardin, Deputy Chief Operating Officer and Head of Corporate and Institutional Banking at BNP Paribas, in a statement.

On the use of the chatbots, Darren Cohen, global head of Principal Strategic Investments (PSI), Goldman Sachs, noted that it’s a likely sign of how the product and the banking industry will continue to developl “The rapid proliferation of Symphony bots and application integrations across the trade lifecycle and throughout the enterprise gives us a glimpse into the future,” he said in a statement. “Symphony’s secure infrastructure and diverse ecosystem will enable the industry to unlock significant operational efficiency and meaningfully enhance the client experience.”

The other side of the communications are coming from organizations that are using Symphony to communicate with each other and share information across walled gardens.

Alex Manson, Global Head of SC Ventures, Standard Chartered, pointed out in an interview that this is helping Symphony expand its presence in other verticals, for example with the accounting and legal firms that are using the app to communicate with their clients, who are already using Symphony.

Another vertical that’s seeing some early traction with Symphony is government, which has a similarly strong need for security and audit trails. The startup is currently running some trials with government groups but declined to provide details on them.

Interestingly, Symphony is also exploring another kind of walled garden expansion:

Gurlé said that within banks, wholesale and retail sides are looking to work together more closely, and they are using Symphony for that purpose. In one product that Symphony is still developing, it’s looking of ways of incorporating popular consumer messaging applications like WhatsApp and WeChat into its system as well: “This is where a large proportion of the retail side’s users are,” he said. The idea is that these kinds of integrations will help create and track conversations on those consumer platforms more easily, helping with the bank’s wider audit trail. 

For its investor-customers, Symphony represents not just a service that can help them get their jobs done more efficiently, but an opportunity for learning at a time when many fintech startups, including challenger banks, are nipping at incumbents’ feet.

“What is the bank of today versus the bank of tomorrow?” Manson said. “Collaboration tools give us the potential to bridge verticals, especially as the lines between them become blurry.”

VCs bet $12M on Troops, a Slackbot for sales teams

Slack wants to be the new operating system for teams, something it has made clear on more than one occasion, including in its recent S-1 filing. To accomplish that goal, it put together an in-house $80 million venture fund in 2015 to invest in third-party developers building on top of its platform.

Weeks ahead of its direct listing on The New York Stock Exchange, it continues to put that money to work.

Troops is the latest to land additional capital from the enterprise giant. The New York-based startup helps sales teams communicate with a customer relationship management tool plugged directly into Slack. In short, it automates routine sales management activities and creates visibility into important deals through integrations with employee emails and Salesforce.

Troops founder and chief executive officer Dan Reich, who previously co-founded TULA Skincare, told TechCrunch he opted to build a Slackbot rather than create an independent platform because Slack is a rocket ship and he wanted a seat on board: “When you think about where Slack will go in the future, it’s obvious to us that companies all over the world will be using it,” he said.

Troops has raised $12 million in Series B funding in a round led by Aspect Ventures, with participation from the Slack Fund, First Round Capital, Felicis Ventures, Susa Ventures, Chicago Ventures, Hone Capital, InVision founder Clark Valberg and others. The round brings Troops’ total raised to $22 million.

Launched in 2015 by New York tech veterans Reich, Scott Britton and Greg Ratner, the trio weren’t initially sure of Slack’s growth trajectory. It wasn’t until Slack confirmed its intent to support the developer ecosystem with a suite of developer tools and a fund that the team focused its efforts on building a Slackbot.

“People sometimes thought of us, at least in the early days, as a little bit crazy,” Reich said. “But now Slack is the fastest-growing SaaS company ever.”

“We think the biggest opportunity in the [enterprise SaaS] category is going to be tools oriented around the customer-facing employee (CRM), and that’s where we are innovating,” he added.

Troops’ tools are helpful for any customer-facing team, Reich explains. Envoy, WeWork, HubSpot and a few hundred others are monthly paying subscribers of the tool, using it to interact with their CRM in a messaging interface and to receive notifications when a deal has closed. Troops integrates with Salesforce, so employees can use it to search records, schedule automatic reports and celebrate company wins.

Slack, in partnership with a number of venture capital funds, including Accel, Kleiner Perkins and Index, has also deployed capital to a number of other startups, like Lattice, Drafted and Loom.

With Slack’s direct listing afoot, the Troops team is counting on the imminent and long-term growth of the company’s platform.

“We think it’s still early days,” Reich said. “In the future, we see every company using something like Troops to manage their day-to-day.”

The Slack origin story

Let’s rewind a decade.

It’s 2009. Vancouver, Canada.

Stewart Butterfield, known already for his part in building Flickr, a photo-sharing service acquired by Yahoo in 2005, decided to try his hand — again — at building a game. Flickr had been a failed attempt at a game called Game Neverending followed by a big pivot. This time, Butterfield would make it work.

To make his dreams a reality, he joined forces with Flickr’s original chief software architect Cal Henderson, as well as former Flickr employees Eric Costello and Serguei Mourachov, who like himself, had served some time at Yahoo after the acquisition. Together, they would build Tiny Speck, the company behind an artful, non-combat massively multiplayer online game.

Years later, Butterfield would pull off a pivot more massive than his last. Slack, born from the ashes of his fantastical game, would lead a shift toward online productivity tools that fundamentally change the way people work.

Glitch is born

In mid-2009, former TechCrunch reporter-turned-venture-capitalist M.G. Siegler wrote one of the first stories on Butterfield’s mysterious startup plans.

“So what is Tiny Speck all about?” Siegler wrote. “That is still not entirely clear. The word on the street has been that it’s some kind of new social gaming endeavor, but all they’ll say on the site is ‘we are working on something huge and fun and we need help.’”

Siegler would go on to invest in Slack as a general partner at GV, the venture capital arm of Alphabet .

“Clearly this is a creative project,” Siegler added. “It almost sounds like they’re making an animated movie. As awesome as that would be, with people like Henderson on board, you can bet there’s impressive engineering going on to turn this all into a game of some sort (if that is in fact what this is all about).”

After months of speculation, Tiny Speck unveiled its project: Glitch, an online game set inside the brains of 11 giants. It would be free with in-game purchases available and eventually, a paid subscription for power users.

Against the Slacklash

Such hate. Such dismay. “How Slack is ruining work.” “Actually, Slack really sucks.” “Slack may actually be hurting your workplace productivity.” “Slack is awful.” Slack destroys teams’ ability to think, plan & get complex work out the door.” “Slack is a terrible collaboration tool.” “Face it, Slack is ruining your life.”

Contrarian view: Slack is not inherently bad. Rather, the particular way in which you are misusing it epitomizes your company’s deeper problems. I’m the CTO of a company which uses Slack extensively, successfully, and happily — but because we’re a consultancy, I have also been the sometime member of dozens of others’ Slack workspaces, where I have witnessed all the various flavors of flaws recounted above. In my experience, those are not actually caused by Slack.

Please note that I am not saying “Slack is just a tool, you have to use it correctly.” Even if that were so, a tool which lends itself so easily to being used so badly would be a bad tool. What I’m saying is something more subtle, and far more damning: that Slack is a mirror which reflects the pathologies inherent in your workplace. The fault, dear Brutus, is not in our Slacks, but in ourselves.

Slack’s IPO filing shows it fears a Facebook-style privacy disaster

Stop the bleeding before it starts.
Stop the bleeding before it starts.


Slack knows a lot about you, and it realizes that could one day be a serious problem.  

The company behind the messaging service used by media organizations, tech behemoths, and Fortune 500 companies around the world published its plan to go public on April 26, and the document paints a detailed picture of the company’s hopes and fears. One fear, in particular, is of note: a Facebook-style privacy disaster. 

Buried deep in the “risk factors” section of the prospectus — along concerns of hackers and market changes — lies the explicit worry that a severe privacy misstep by the company could result in grave harm to the business. No one, after all, wants to trust their personal data to a company that repeatedly betrays their trust

“Since many of the features of Slack involve the processing of personal data or other data of organizations on Slack and their employees, contractors, customers, partners, and others,” reads the prospectus, “any inability to adequately address privacy concerns, even if such concerns are unfounded, or to comply with applicable privacy or data security laws, regulations, and policies, could result in liability to us, damage to our reputation, inhibition of sales and to our business.”

In other words, if people perceive Slack to show a Facebook-like dismissiveness of their privacy, the company’s reputation — and subsequently its business — will suffer. 

“Any actual or perceived failure by us to comply with privacy, data protection, information security, consumer privacy, data residency, or telecommunications laws, regulations, government access requests, and obligations in one or multiple jurisdictions could result in proceedings, actions, or penalties against us and could harm our business and reputation,” adds the prospectus. 

Slack, of course, has a very different business model than Facebook. However, by its vary nature, the company’s servers host the secrets and personal data of its customers. Should Slack become dismissive of the trust its customers have placed in it, it rightly realizes that businesses will start to look elsewhere.

Notably, Slack does not end-to-end encrypt communications — a fact that could theoretically be exploited not just by hackers but by shady third-party apps pulling data. If that sounds far fetched, you need look no further than the Cambridge Analytica scandal — in which a Facebook personality quiz app gathered data on users and their friends — to see the potential privacy ramifications. 

Thankfully, the prospectus shows that Slack is very much aware of this risk, and clearly has no desire to follow in Facebook’s troubling footsteps. Let’s hope that doesn’t change any time soon. 

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