Slack has reportedly invested in a US-based recruitment startup without ever meeting its CEO.
Crosschq, a California-based startup founded in 2015, managed to raise $5.5 million in funding during the coronavirus pandemic, according to CNBC, all via video conferencing.
The company’s CEO, Mike Fitzsimmons, held a virtual meeting in early March, where he told the board of directors he was going to make an unexpected call to Slack.
At the time, with the global economy on the verge of shutting down due to the outbreak of COVID-19, Fitzsimmons wanted to make sure his business had enough money to see it through.
Slack had previously shown an interest in the firm, with its head of investment, Jason Spinell, having already made contact with the company at the start of the year, although Crosschq rejected financial-backing at that time. However, following the economic disruption caused by the coronavirus lockdown, Slack’s offer was ultimately reconsidered.
Fitzsimmons began an email correspondence with Spinell to see if they were still interested in Crosschq, despite having never met face-to-face and knowing they would be unable to for some time. Over the next two months, via four video conferencing calls, Slack joined a $5.5 million financing round, alongside other Crosschq investors.
“Having been in the start-up world and having been through this enough times, the mechanics of this process were all different,” Fitzsimmons said, according to CNBC. “You’re accustomed to doing investor presentations and PowerPoints in front of the room and it’s intimidating and you get peppered with questions. It’s a very different game when you’re attacking it this way.”
Speaking to CNBC, Spinell said that Slack has done a number of investments via Zoom, which he said required “extreme conviction in the product and team”.
“What has changed slightly for us due to the pandemic, is that we’re even hungrier for investments that fulfil obvious ‘future of work’ needs that are even more pronounced in our newly remote world,” Spinell said.
The lockdown has forced companies to adapt the way they operate. In May, Norwegian video conferencing startup Pexip was forced to debut on the stock market entirely virtually, using its own software. It’s now said to be valued at $942 million.