Markets

Dropbox aims to raise $748m through IPO

Dropbox aims to raise $748m through IPO

The IPO value is less than its 2014 funding round, when it was valued at $10 billion. Including restricted stock units, the valuation would be about $7.6 billion. The valuation as calculated from the filing is around $6.7 billion.

The gap between private valuations and public market aspirations highlights the disconnect between the premium that private investors put on potential innovation, and the financials-based analysis that public market shareholders are focused on.

The San Francisco, CA-based company plans to raise $612 million by offering 36 million shares (25% insider) at a price range of $16 to $18.

Additionally, the document filed by Dropbox said Salesforce's ventures arm, Salesforce Ventures, had agreed to buy $100 million worth of Dropbox stock.

The performance of Dropbox - along with Spotify, which is also expected to trade publicly in the early spring - will be watched closely by venture capitalists as the two marquee IPOs of the first half of the year.




Chief Executive Officer and co-founder Drew Houston will hold 22 percent of the shares outstanding after the offering, or 24 percent of the voting power, according to the filing.

The pair started Dropbox in 2007. While it claims to have 500 million users in 180 countries, it posted only 11 million paying clients at the end of previous year. Investors are sure to have questions for the file-sharing technology leader as it embarks on its marketing road show.

The S-1 form that Dropbox filed with the Securities and Exchange Commission showed that the company lost $111 million on revenue of $1.1 billion a year ago.

The company's net loss narrowed to US$111.7 million in 2017 from US$210.2 million in 2016.


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