Slack Technologies Inc. is planning to debut on the stock market through a direct listing in the second quarter this year, sources told the Wall Street Journal Friday. 

Slack's potential direct listing will be the second-largest tech IPO to direct list and bypass the traditional underwriting process, following music streaming service Spotify's  (SPOT)  debut last year on the New York Stock Exchange.

The inter-office messaging service has a valuation of over $7 billion based on its latest funding round in August when it raised $427 million. Overall, the company has raised more than $1.2 billion since 2013. 

Slack had more than eight million daily active users and three million paid users as of last year. 

With the traditional underwriting process, initial investors are lined up to buy shares at a previously set price, while with a direct listing, the market sets the share price. 

Spotify's debut at $165.90 was considered a success and lacked the volatility many market watchers were expecting, since more than 90% of the company's shares were available for trade at its debut. 

Slack is reportedly working with Goldman Sachs, Morgan Stanley and Allen & Co on the IPO.

What does government shutdown mean for the IPO landscape? 

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