Dropbox, cloud storage company and tech unicorn, files for IPO

Dropbox files for a $500 million IPO
Mario Tama Getty Images

25 February, 2018

In a filing with the Securities and Exchange Commission on Friday, Dropbox said it planned to raise up to $500 million in the offering, and meant to use the money for a variety of purposes, including potential acquisitions.

The big question is whether the company will achieve the $10 billion valuation it raised in the private markets. As tech publication GeekWire notes, the data center move help saved Dropbox about $75 million over a two-year period.

Dropbox was last valued at $10 billion in a 2014 venture-capital round.

Dropbox biggest competitor in the market is Box who has same file syncing business but Box deals with Government and enterprise customers which means higher-level security for the files while Dropbox only deals with individual customers that's why the company has followed simplicity in its application.

One of the world's largest online services for backing up documents, photos and videos is opening its files in an initial public offering (IPO) of stock.

Dropbox, which continues to seek profitability, says it plans to raise $500 million-although this is very likely going to change as later filings are submitted.

More news: Winter weather advisory in effect until 4 am Sunday

Founder and CEO Drew Houston owned 25.3% of the company.

Dropbox will also be the first IPO for Y Combinator, the accelerator program that has become a hallmark of Silicon Valley promise.

In its IPO filing with the US Securities and Exchange Commission, Dropbox said it has 11 million paying subscribers out of 500 million total registered users in 180 countries.

The group said it had 500m registered users, of which 100m had signed up since the start of 2017, and that it was generating around $112 in average revenue per paid user. Therefore, the company didn't need to hire a lot of sales and marketing staff. However, these are significantly improved margins as the company lost nearly $210 million in 2016 and $326 million in 2015.

Meanwhile, Dropbox's net loss was $210.2 million previous year which decreased and now its $111.7 million in 2017, so according to this chart company is doing a pretty good job but they made a decision to take their company towards a higher level.

Goldman Sachs, JPMorgan, Deutsche Bank are among underwriters of the IPO, according to the filing.

More news