Slack raises $250m to top $5bn valuation

Battle for workplace dominance hots up, following launches from Facebook and Microsoft

Workplace chat start-up Slack has hit a $5.1bn (£3.8bn) valuation after raising $250m in series G funding.

The latest round, led by SoftBank, takes Slack's total amount raised to just under $790m and bumps up its valuation from $3.8bn last year.

Slack has now raised over $100m a year for four consecutive years.

CEO Stewart Butterfield told Bloomberg that the money will be used for "operational flexibility", as well as to prove Slack's worth to larger clients.

"We have a lot of large customers," he said. "The bigger ones are a lot more conservative.

"As they move tens of thousands of people over to Slack they want to make sure we're going to be around.

"It especially helps with potential recruits. We still have to compete with Facebook and Google and they give substantial offers there."

Slack launched in 2009 and last year came under increasing pressure as Microsoft and Facebook upped their game in the workplace chat space.

Facebook launched its business-focused internal social network Workplace via 13 channel partners in October.

Microsoft also launched its own product in November, dubbed Microsoft Teams.