$10.6M incentive deal helps Denver pick up the Slack
Slack Technologies, the rapidly growing workplace-messaging platform based in San Francisco, said it will open an office in Denver after receiving $10.6 million in state economic development incentives Thursday morning.
“We are excited to open a new office in Denver later this year and to join such a vibrant and innovative community. We look forward to sharing more in the months ahead,” Slack spokesman Chris Kraeuter said.
The Colorado Economic Development Commission on Thursday approved the state job growth incentive tax credits in return for the creation of 550 net new fulltime jobs in the state.
The jobs include positions in research and development, customer service, administration, and sales and marketing. The average annual wage of those jobs will be $107,975, which is 63 percent higher than the average annual wage in Denver County.
Kraeuter declined to confirm that the new office will be the second headquarters with 550 jobs, but the evidence points to that being the case.
Colorado was the first state to put an offer on the table, giving it a first-mover advantage, said Dan Lane, global business manager with the Colorado Office of Economic Development and International Trade.
“We feel Colorado’s offer puts us in a good competitive position,” Lane said before Slack’s announcement of a new office in Denver.
The other cities that Slack studied for its HQ2 are Phoenix; Austin, Texas; and Portland, Ore.
Slack was founded in 2009 in Vancouver, British Columbia, as Tiny Speck, which
produced a computer game called “Glitch.” The company relocated to San Francisco and shifted its focus to developing a communication platform called Slack that allows workers to interact more efficiently than via email.
The company has raised $841 million in private equity, including a $250 million round last fall led by Softbank’s Vision Fund. That round lifted the company’s estimated value to $5.1 billion.
State tax credits won’t benefit Slack directly unless it starts to turn a profit, which isn’t the case yet. But Colorado did change its rules to allow companies to sell their tax credits to others who have a tax obligation.
Since September, Slack’s number of daily active users has shot up 33 percent to 8 million, and its count of its paid users is now at 3 million, up 50 percent.
It is also believed to be considering an initial public offering in the near future, according to Business Insider.
Denver is in the running with 20 other cities for 50,000 jobs and billions of investment Amazon promises to bring to a second headquarters outside of Seattle. Even if Denver doesn’t land the big prize, economic development officials said a steady flow of smaller deals that over time could bring tens of thousands of jobs to the state.
Lane said the northern Front Range’s cluster of technology firms is expanding, with larger firms like Amazon and Google growing their operations here. Vista Equity Partners, run by Denver native Robert F. Smith, has also brought hundreds of jobs at smaller tech firms like Vertafore, Marketo and Xactly to the city.
That concentration is important in recruiting tech workers and executives, who know they will have more career opportunities if they decide to leave the increasingly expensive Silicon Valley and San Francisco Bay areas.