Markets

Dropbox going public, could hit $7 billion valuation in IPO

Dropbox going public, could hit $7 billion valuation in IPO

Monday's SEC filing, which also mentioned the sale of $100 million in stock to the venture capital division of Salesforce.com, begins a period in which bankers and Dropbox executives will market shares. The company plans to sell a whopping 36m in shares priced at between $16 and $18 per unit and this would mean Dropbox would be valued at approximately $7.5bn at the midpoint of that range.

In its regulatory filing with the Securities and Exchange Commission, Dropbox reported 2017 revenue of US$1.11 billion, up 31 percent from US$844.8 million, a year earlier.

While the Class A shares have little voting power, they indicate the company values itself at about $8 billion -a bit less than the $10 billion level it touted in private funding efforts almost four years ago.

The company has adopted a three-tier share system in which co-founders Arash Ferdowsi and Drew Houston own a majority of the Class B shares that have no financial rights but have 10 votes for every Class A share vote. The remaining 98 percent will accounted for by the Class B shares now held by CEO Drew Houston and other major investors.

Dropbox also will reverse-split the current shares outstanding to inside investors at a ratio of 1.5 to 1. Last week, the companies announced a partnership to integrate and sell Salesforce's customer relationship management technology with Dropbox's storage and collaboration tools.

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The company did not specify an exact date to launch its IPO, but once Dropbox does go to public, it will enter a highly competitive market. Last year the company grew revenues by 30% year over year but still lost $112 million, about half its 2016 loss and about a third of its 2015 loss.

According to its IPO prospectus it has more than 500m registered users across 180 countries. Their schedule begins with meetings in NY on Monday, then in Boston later this week, a person familiar with the schedule said.

Goldman Sachs, J.P. Morgan, Deutsche Bank, Allen & Co., and Bank of America are managing the offering.

Dropbox's stock is expected to start trading on the Nasdaq late next week under the ticker symbol DBX.


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