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Dropbox Unsealed: Files for IPO with a valuation of $7.6 billion

The year is turning out to be a darling for tech IPOs. Closely following the heels of Spotify, Dropbox has now filed for an IPO. According to the recent filing made with the US Securities and Exchange Commission, the 11-year old file-sharing company plans to market 36 million shares of its Class A common stock in the first half of 2018. The company will list itself on Nasdaq under the ticker DBX.

File hosting service Dropbox IPO
Image courtesy: Dropbox in 30 minutes, Flickr

Dropbox intends to sell its stock for $16 to $18 per share, which tallies to a market value of approximately $7.1 billion. The valuation increases to $7.6 billion including the restricted stock units. However, this is much lower than the earlier $10 billion valuation by private investors.

Dropbox plans to raise $500 million in its stock market debut. Interestingly, the Y Combinator unicorn has successfully raised around $600 million from the private equity investors.

Dropbox, which had recently deepened its collaboration with Salesforce, has agreed to sell $100 million of common stock to the corporate’s venture arm, as per the filing.

Journey so far

Dropbox’s journey has been impressive so far. The company made quick progress in terms of user base, something that is likely to entice investors. From 1 million users in 2010, the company now boasts of close to 500 million people using its services, including around 11 million paid users.

Though the company has never released its numbers, it is estimated that the average annual revenue per user is $111, generating a total revenue of almost $1.1 billion in 2017. However, the company has never turned a profit though it has been cutting its losses over the past few quarters. Another area where the company impresses is its positive cash-flow since 2016.

From 1 million users in 2010, the company now boasts of close to 500 million people using its services, including around 11 million paid users.

Cloud storage is currently crowded with major players including Alphabet, Apple, Amazon, and Microsoft. Despite this increasing competition, Dropbox has managed to carve out a user base of its own.

In the coming days, Dropbox will be compared to its rival Box Inc, which went public in 2015. However, Box’s stock has been trading in red ever since it went public.

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