Unlike a traditional IPO in which companies sell shares to raise proceeds, a direct listing is a way for existing shareholders to sell stock.
Here are some facts about Slack, which is one of the most high-profile companies left to go public in 2019. Its debut could be a bellwether for other tech listings this year.
E-mail Killer?
Slack is an internet-based platform that allows teams and businesses to communicate with each other. It organises discussions by topic and group, is similar to instant messaging chatrooms, and allows cooperation on documents and files.
Launched in 2013, Slack has replaced e-mail discussions at many companies, although e-mail is still the dominant medium of communication in workplaces.
Diverse Clients:
The San Francisco-based company, whose customers include Electronic Arts Inc, Nordstrom Inc and Ford Motor Co, said it ended the first quarter with 95,000 paid customers.
Slack had more than 500,000 organizations on its free subscription plan, as of Jan. 31.
As of April 30, Slack had 645 paid customers with over $100,000 (£78,970) in annual recurring revenue, an 84% increase from a year earlier, and these large customers accounted for 43% of its total revenue.
Slack also said it had over 10 million daily active users.
Rising Competition:
Its closest competitor is Microsoft Teams, a free chat add-on for Microsoft Corp's Office365 users. Other similar platforms include Google Hangouts, Workplace by Facebook and Cisco Systems Inc's Webex Teams.
The global market for workplace collaboration is expected to hit $3.2 billion by 2021, according to research firm IDC.
Loss Making:
Slack reported an adjusted operating loss of $33.8 million for the quarter, compared with a $20.2 million loss a year earlier.
Slack's total revenue grew 67% to $134.8 million in the first quarter.
The company expects second-quarter revenue to grow 51% to 53% to a range of $139 million to $141 million, with an adjusted loss of between $77 million and $75 million.
Valuation:
The company was hoping for a valuation of more than $10 billion in the listing, Reuters had previously reported.
Private trading suggests the company could list at a price range of $26-$32, which would imply a market cap of $14 billion-$17 billion, according to funding database PitchBook.
Slack's last private valuation was $16.1 billion, based on shares sold in private transactions, according to Matthew Kennedy, senior IPO market strategist at Renaissance Capital.
Investors:
Slack's biggest shareholders include Accel Partners, an investor in Facebook and Dropbox, which holds 24%, followed by Andreessen Horowitz, with 13.3%. Japanese conglomerate SoftBank owns 7.3%.
Fewer Advisers:
The company has hired Goldman Sachs, Morgan Stanley, and Allen & Co to be financial advisers on the direct listing, which requires a fraction of the number of banks compared to an IPO.
(Reporting by Saumya Sibi Joseph, Arundhati Sarkar and Arjun Panchadar in Bengaluru; Editing by Shounak Dasgupta)
