Dropbox Sets IPO Target Valuation at $7 Billion to $8 Billion

13 March, 2018, 04:28 | Author: Terri Saunders
  • Illustration

Dropbox, which was founded in 2007, registered for an IPO last month, calling itself a pioneer in the worldwide adoption of file sync and share software.

The company's revenue increased more 30 per cent past year to US$1.1 billion from US$845 million in 2016.

The valuation, on a fully diluted basis, is about 20% below the $10-billion level the company achieved in its latest private funding round in 2014.

That's after the storage company disclosed Monday that it would sell new shares at between $16 and $18 a share, meaning Dropbox would be valued at around $7 billion at the high end of the range.

There will be a total of 36 million shares up for grabs in the Dropbox IPO.

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Additionally, the document filed by Dropbox said that Salesforce's ventures arm, Salesforce Ventures, had agreed to buy $100 million (£72.1 million) worth of Dropbox stock. Still, listing flops in 2017 from Snap Inc. and Blue Apron Holdings Inc. - who have both traded below their last private valuation - are fresh in investors' memories.

Dropbox also will reverse-split the current shares outstanding to inside investors at a ratio of 1.5 to 1. Today, Dropbox has more than 500 million users in more than 180 countries. The cloud storage firm said its free Basic plan is the main vehicle for drawing in new paying customers.

Dropbox had revenue of $603.8 million in 2016, and that grew to $844.8 million in 2016 and $1.1068 billion in 2017. But it does beg more pressing questions: Does Dropbox have a big plan for how to convert more people into paying users? This list includes the likes of Goldman Sachs, JPMorgan, Deutsche Bank, Allen, Merrill Lynch, RBC Capital Markets, Jefferies, Macquarie, Canaccord Genuity, JMP Securities, KeyBanc Capital Markets and Piper Jaffray.

In that regard, the Salesforce investment and integration, and its timing of being announced alongside the sober IPO range, is a notable vote of confidence in Dropbox.

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