Salesforce Buys Slack in a $27.4B Deal
The #1 CRM platform, Salesforce, agreed to purchase Slack for a $27.4B deal marking it the biggest acquisition in the company's history.
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Updated November 2026. This was first published on 23 November 2022. The idea is the same. Any number below is what the original piece said then. It is not a new count.
Key takeaways
- The #1 CRM platform, Salesforce, agreed to purchase Slack for a $27.4B deal marking it the biggest acquisition in the company’s history.
- Marc Bennett, co-founder and CEO, wasn’t shy about his feelings on the deal.
- Together, Salesforce and Slack will shape enterprise software’s future and transform how everyone works in the all-digital, work-from-anywhere world.
The #1 CRM platform, Salesforce, agreed to purchase Slack for a $27.4B deal marking it the biggest acquisition in the company’s history.
Marc Bennett, co-founder and CEO, wasn’t shy about his feelings on the deal. Together, Salesforce and Slack will shape enterprise software’s future and transform how everyone works in the all-digital, work-from-anywhere world. Stewart and his team have built one of the most beloved platforms in enterprise software history, with an incredible ecosystem around it. I’m thrilled to welcome Slack to the Salesforce Ohana once the transaction closes.".
“Salesforce started the cloud revolution, and two decades later, we are still into all the possibilities it offers to transform the way we work. The opportunity we see together is massive,” said Slack CEO Stewart Butterfield. “As software plays a more and more critical role in the performance of every company, we share a vision of reduced complexity, increased power and flexibility, and ultimately a greater degree of alignment and organizational agility. Personally, I think this is the most strategic combination in the history of software, and I can’t wait to get going.”.
Salesforce, which started as a cloud-based software company for sales reps, is transforming into a software company forced to be reckoned with. Other recent significant purchases include Tableau, a data visualization company, for $15.9 billion in 2019, and Mulesoft, whose software connects data in different places, for $6.5 billion.
Salesforce will purchase Slack through a combination of cash and stock. The deal includes a purchase price of $26.79 a share and.0776 shares of Salesforce. This comes to around $45.86 a share for the stockholders.
This deal allows Salesforce to compete with Microsoft in the enterprise social arena, with Slack squaring off against Teams. This is something Slack couldn’t accomplish on its own. The two behemoths are battling across other areas as well.
When Salesforce purchased Tableau that was a direct challenge to Microsoft’s Power BI, both companies competed for LinkedIn, which Microsoft eventually won out. Salesforce even tried to compete with Microsoft Office with the acquisition of Quip. That didn’t turn out how they hoped for it.
What does it mean for Slack? #
Slack has struggled to keep up with the intense competition in the office chat and productivity platforms. The company has been losing value ever since going public in April 2019 and has failed to turn a profit in the last three quarters. The company did not have a clear path to profitability and was ripe for the taking.
Slack gets to reignite its slow growth under a company with a global network of the sales staff. The 130,000 paid customers are sure to increase given all the resources now at its disposal.
Davidson, was surprised at Slack being unable to capitalize on the pandemic given folks working remotely. “We have been surprised by the limited success Slack has seen from the pandemic and the rise of remote work. Microsoft Teams has been able to capitalize on the opportunity presented by the pandemic better than Slack, in our view, and this rapid growth in adoption has hurt Slack.”.
Slack will now have a tremendous asset on its side to compete against the likes of Teams and others in the messaging space. The question remains whether the sale of it to Salesforce could be a profitable venture. Or does Microsoft and others continue to dominate Slack in the messaging business?
Let’s take a look at how it all began for Slack.
History of Slack #
Slack was founded by Stewart Butterfield, a serial entrepreneur, in 2009 in Vancouver, British Columbia, Canada. It started as an internal tool for the development of Glitch.
Glitch started as a web-based massively multiplayer online game designed with non-violent, collaborative gameplay. Butterfield got $% million in funding for this project, which ultimately failed.
When Glitch closed, the company launched the Slack real-time collaboration app and platform, raising $17 million from Accel Partners, Andreessen Horowitz and Social Capital.
After Slack was launched in August 2014, the company renamed itself Slack Technologies. The name Slack is actually an acronym meaning “Searchable Log of All Conversation and Knowledge”.
The company raised $120 million in October 2014 in venture capital money with a $1.2 billion valuation led by Kleiner Perkins and GV. Slack went on to purchase Screenhero, a voice, video, and screen sharing company in January 2015.
Over the next few years, Slack managed to raise hundreds of millions of dollars from other investors such as Thrive Capital, GGV, and Comcast ventures. This led to the company’s initial public offering in the first half of 2019.
Not many businesses could grow and raise money by leaps and bounds as they seemed to accomplish.
How Slack Scaled? #
Slack made customer feedback on the main focus when it decided to roll out the application to users.
“We begged and cajoled our friends at other companies to try it out and give us feedback. The pattern was to share Slack with progressively larger groups. We would say, ‘Oh, that great idea isn’t so great after all.’ We amplified the feedback we got at each stage by adding more teams,” Butterfield says.
The folks at Slack realized that their product functioned very differently as team size increased. Armed with this information, they gathered the data from the larger teams and went to work improving the product.
When they were done making the necessary changes began the process all over again, getting customer feedback. After all of the kinks were worked out they decided to share their product with a much wider audience.
They announced a preview release in August 2013, just a mere seven months after they started. Slack used a press blitz to get the word out about their product. They asked folks to request an invitation to try out their offering and see what they thought.
On the first day of the release, 8,000 people sent a request to try out the application, with that number growing to 15,000 in the first two weeks.
Stewart Butterfield attributes most of the success to people spreading word about Slack to their friends and the Internet. He estimates that 20% of how they grew could be traced back to the original release. the remainder is people posting about that article. “The other 80% is people posting about that article. I almost never go to news sites — it’s overwhelming how much content is out there. But I will pay attention to what my friends are picking up and sharing.”.
The Future of Salesforce #
The future of Salesforce looks bright and promising. Given Slack’s acquisition, they can know compete and keep up with the likes of Microsoft and others. The purchase of Slack provides them another tool to expand their business.
Salesforce plans to fully integrate Slack into each of its cloud services and use it as the new interface for its Salesforce Customer 360 platform. This will make communication easier for companies to interact with their employees, customers, and external partners.
“This isn’t just about the future of collaboration. This is a new ‘operating system’ for how knowledge workers will interact in the future, connecting the front office, back office, and customers in a single platform,” says Aaron Levie, co-founder and CEO at content management company Box.
Salesforce hopes to transform from a cloud computing solution to a primary software platform of choice, powering all of a company’s modern infrastructure and operational needs.
The big question remains whether Salesforce can improve and gain ground on Microsoft Teams the way Slack couldn’t on its own? Can they improve on the just $834 million sales Slack had in the past 12 months?
Based on the other two major acquisitions Salesforce has had in the past couple of years (Mulesoft, Tableau), they should be just fine. Both of those assets continue to grow since SalesForce purchased them.
Given the assets and past success, Salesforce has a bright future and will be a major player in the future of work for years.
Questions and answers #
What is the main point? #
The #1 CRM platform, Salesforce, agreed to purchase Slack for a $27.4B deal marking it the biggest acquisition in the company’s history.
What else did the original piece say? #
Marc Bennett, co-founder and CEO, wasn’t shy about his feelings on the deal.