Dropbox files for IPO of up to $500 million

Dropbox file IPO $500 million

Dropbox files for IPO, Box CEO says it’s well-timed

The most anticipated IPO of the tech industry is finally here. Dropbox publicly confirmed its public offering by unveiling the regulatory filing on Wednesday.

The cloud storage provider said it will be targeting $500 million, however, we all know the figure is just a placeholder.

Dropbox, founded in 2007, has raised more than $600 million to date.

The company generated $1.1billion revenue in 2017, according to the filing. Dropbox lost nearly $112 million last year and is not yet profitable. However, the margin of loss is much lower than 2016 and before.

The company has a fermium model and says it has more than 500 million registered users. However, only a small fraction of the total users, about 11 million are currently paying, while remaining to use the cloud services for free. Dropbox’s per revenue per paying user is about $111.

Now the question arises, will Dropbox be able to achieve the $10 billion valuations it raised in private markets?

Part of the company’s success will be measured compared to rival company Box that went public in 2015.

“The market for content collaboration platforms is competitive and rapidly changing. Certain features of our platform compete in the cloud storage market with products offered by Amazon, Apple, Google, and Microsoft, and in the content collaboration market with products offered by Atlassian, Google, and Microsoft. We compete with Box on a more limited basis in the cloud storage market for deployments by large enterprises,” said Dropbox.

Recently, Box CEO Aaron Levie talked about Dropbox’s upcoming IPO to Fortune and said that although both the companies offer cloud storage, they both target different kinds of customers.

Levie appreciated Dropbox’s financial results that were – for the first time – released in the filing. “From the financials, it seems they like they put together an exciting business,” he said.

According to Levie the main difference between both of them is that Dropbox offers services to small and medium-sized businesses, unlike Box which targets large tech companies.

He jokingly said that the major similarity between Box and Dropbox was in their names.

Although Dropbox said in its filing that it will hire more staff and will offer big companies, Levie thinks that Dropbox might not be able to do so as Dropbox’s product lacks the regulatory and security requirements.

Levie further said that Dropbox’s IPO is well-timed. “I think it’s a great time to go public if you have a strong business model.”

When asked what advice he will give to Dropbox’s CEO Drew Houston about the upcoming ICO and how to lead the company after it, Levie said that Houston should remain more focused on the company’s corporate culture and core products.

Houston holds about 25.3 percent stake in the company. The filing also noted that Sequoia Capital is the largest shareholder in Dropbox owning 23.3 percent of the overall shares.

Also Read: What is Siacoin and How is it a threat to Dropbox and Amazon?

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