Slack Technologies is expected to be valued by investors at US$16-billion to $17-billion when it lists its shares publicly next week, according to people familiar with the matter.

That valuation is roughly based on the workplace chat and collaboration software company’s projected revenue and current growth rate, said the people, who asked not to be identified discussing private talks.

The expected value is up from the $7.1-billion in its last private funding round in August. It’s similar to the company’s share sales on the private market, where in April investors were snapping up stock at prices that would give the company a valuation of about $16-billion.

A spokeswoman for Slack declined to comment.

Slack is planning to have its shares start trading on 20 June on the New York Stock Exchange under the ticker WORK.

Investors’ valuation expectations are based on some back-of-the-envelope maths: Slack said on Monday that it expects at least $590-million in revenue in its 2020 fiscal year, which ends January. That’s a growth rate of as much as 50% compared to the previous year.

That suggests the company could bring in almost $900-million in fiscal year 2021, and investors are looking to value the company at roughly 20 times that projected revenue, the people said.

No guarantee

That’s even as the annual revenue growth rate has slowed from 110% and 82% in the 2018 and 2019 fiscal years, respectively, according to a regulatory filing.

Slack said in its filings with the US Securities and Exchange Commission that it can’t guarantee that its plans to increase revenue and cut operating losses will ever allow it to become profitable.

Unlike a surge of tech companies that have gone public this year in traditional initial public offerings, Slack is going public through an unusual direct listing. The company won’t issue new shares to raise funds for itself. Rather, its investors will be allowed to begin selling existing shares immediately. — Reported by Sonali Basak, Crystal Tse and Ellen Huet, with assistance from Sarah McBride, (c) 2019 Bloomberg LP