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Outside Slack’s office in San Francisco. (BigStock Photo / David Tran)

Slack has raised a whopping $427 million in a new funding round amid a strong challenge from Microsoft Teams in the competitive workplace productivity market.

Slack said the round, led by Dragoneer Investment Group and General Atlantic, gives the company a valuation of $7.1 billion. Slack has now raised a total of $1.27 billion in its lifetime.

“The way people work is changing, and we are committed to delivering the best product and experience for our customers in this new era,” Slack wrote in a blog post about the funding round. “We pursued this additional investment to give us even more resources and flexibility to better serve our customers, evolve our business, and take advantage of the massive opportunity in front of us.”

Slack boasts 8 million daily active users, 3 million of which are paid. The company says more than 500,000 organizations use its product — including 70,000 paid teams — and 65 percent of Fortune 100 companies are Slack users.

Though Slack executives say they aren’t worried about a strong push from Microsoft Teams, Microsoft certainly seems to be sweating Slack. Microsoft recently added Slack to its official list of competitors in its annual 10-K filing with the U.S. Securities and Exchange Commission. That move came just a few weeks after Microsoft unveiled a free version of Teams.

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