Brief: Slack aims to raise $500m as big tech firms mull over buyout

Photo credit: The news:

• Slack is aiming to raise US$500 million in an ongoing funding round. If the company hits its target, it will have an estimated valuation of close to US$5 billion.
• The “virtual office” platform has attracted interest from potential buyers including Amazon, Microsoft, and Salesforce.

Why it matters:

• The money that Slack raises is likely to be invested in artificial intelligence for automation and a larger platform developer system. The company wants to attract a wider range of corporate clients, so these measures are intended to make its office-oriented messaging service more secure and to assuage privacy concerns.
• The funding round could be a prelude to a buyout offer. When a particularly promising startup is engaged in fundraising, larger tech companies will often make an approach before the round closes in order to give the acquisition target more options.

Source: Recode.