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Slack’s IPO started with a bang as the first trade was priced at $38.50, giving the company a $23 billion valuation, well above the expected $16 billion.

The workplace communication collaboration platform had reportedly projected a $26 per share opening price that would have valued it at $15.7 billion. Within the first two hours of trading, the stock price surged further to $41.85.

Slack used a direct listing process, which means the company itself did not raise money in the IPO, but simply let its stock begin trading on the New York Stock Exchange.

Slack is the latest in a series of high-profile tech IPOs this year, following such notables as Pinterest, Lyft, and Uber. While Pinterest has performed decently, Lyft and Uber have struggled to impress investors since going public.

In buying Slack’s stock, investors had to weigh the immense hype surrounding the company against its lack of profits and the challenges it faces in ever making enough to cover expenses. The company also faces competition from Microsoft and Cisco.

Still, part of the reason its IPO milestone was widely cheered was because users tend to be quite passionate about the workplace tool, which hopes to eventually replace email as the internal collaboration tool of choice for companies.

Founder and CEO Stewart Butterfield is a well-liked and respected entrepreneur, in part because of his role in founding photo-sharing site Flickr. Despite the tragic fate that befell Flickr, which saw its popularity sapped after it was acquired by the perpetually cursed Yahoo, Butterfield rebounded by creating Slack.

Initially, Slack began as an internal communication tool at his new video gaming startup. But Butterfield realized that there might be a bigger opportunity there because enterprise software was still clunky and difficult to use. In addition, mobile and cloud services were creating new openings for new services like Slack to be more useful to a wider array of employees and businesses.

Eventually Slack raised an eye-popping $1.4 billion from private investors on its way to becoming one of Silicon Valley’s most hyped startups.

UPDATED 3:40 p.m.: The stock closed the first day of trading at $38.62.

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