ChatWork, a year older than Slack, raises $2.5M for team chat and collaboration tool

ChatWork, an enterprise social network, today announced that it has raised JPY 300 million (US$2.5 million) from GMO Venture Partners (GMO VP). It marks the first investment in the startup, which is based in Japan and California.

(Update: a press release provided to Tech in Asia inaccurately stated the funding amount in dollars. The investment was actually JPY 300 million, or just over US$2.5 million at the current exchange rate. The text and headline have been updated accordingly.)

ChatWork was an early mover in the team chat and productivity space, recently abuzz thanks to Silicon Valley rival Slack and its nearly US$2.8 billion valuation as of last month. While Slack has been a hit with startups, ChatWork positions itself as a communication tool for non-technical business professionals and small-to-medium enterprises (SMEs).

“Cloud services are absolutely growing in various industries, but business communication still relies a lot on email, and many non-technical business people across the world consider email to be the best and only service to communicate,” Hayato Ishida, ChatWork’s global product manager, tells Tech in Asia. “For those people, it would be harder to use multiple tools at the same time, so we provide a service that combines everything they need in one place.”

For bigger companies

“I think Slack works really well for startups with [technical staff like] engineers,” Ishida continues. “For a small team, every [piece of] information is relevant to what you’re doing. However, if you’re working at company with more than 50 people, there will be many conversations that aren’t relevant. I also think that most SMEs are not using Github, Trello, Mailchimp, New Relic, or other such tools that are famous in the tech industry. Then, integration does not mean anything to them, and Slack turns into a tool just for chatting.”

ChatWork offers text, voice, and video chat in addition to task management and file sharing. It can be used in-browser, without the need to download software, or on mobile with apps for iOS and Android. More than 66,000 companies in 183 countries already use the platform, which is currently adding 30,000 new users a month. It’s on track to surpass 1 million total users by the end of the year, and 100,000 of them are paid users (ChatWork’s premium plans start at US$2 per month, while Slack’s start at US$6.67). The startup additionally claims that 15 percent of free users upgrade to paid plans and more than 60 percent of monthly active users log in daily.

According to Ishida, ChatWork – which has operated in the black since launching in early 2012 – further differentiates itself from Slack and Asian competitors like TypeTalk and Jandi in two ways: external collaboration and security.

Chatting up the US and Europe

“Other services are often used exclusively within the team, even though they might have guest accounts, but ChatWork is also used between companies,” Ishida explains. “We also have almost the same number of corporate users as Slack, and for [more than three] years we’ve maintained bank-level security with zero problems. That provides a high level of credibility to our existing customers and I believe that it has a lot of value for new customers.”

The platform’s top markets are Japan, Vietnam, Taiwan, and the Philippines. ChatWork currently supports English, Japanese, traditional and simplified Chinese, and Vietnamese. Ishida says that more languages are coming before the end of the year.