Monday, March 26, 2018

Dropbox looks to raise $648 million in upcoming IPO

Dropbox also agreed to sell $100 million in stock to Salesforce Ventures in a private placement following the IPO.


Dropbox will seek to raise $648 million when its shares hit the public market later this month.

The cloud-based file sharing company updated its S-1 form with the Securities and Exchange Commission (SEC) and revealed that it will offer 36 million shares priced between $16 and $18 a piece.

At the high end of that range, Dropbox would come out with a valuation of $7.9 billion, which is still below the $10 billion valuations it received with its last private funding round in 2014.

Dropbox also agreed to sell $100 million in stock to Salesforce Ventures in a private placement "at a price per share equal to the initial offering price," the filing revealed. The stock investment comes just days after the companies announced a substantial integration pact that will more tightly link their platforms for joint customers. Salesforce Ventures first invested in Dropbox back in 2014.

Dropbox disclosed in its initial S-1 form that it is not yet profitable, having lost $111.7 million in 2017. But the losses are shrinking each year as revenue climbs. The company said it earned $1.1 billion in revenue last year, up from $603.8 million in 2015. Dropbox has been cash flow positive since 2016.

Meanwhile, Dropbox said it currently has 11 million paying users, which is far less than the 500 million registered users who access its services for free. The company said it generates average revenue of $111.91 per paying user.

Expectedly, the company disclosed in the filing that its business depends on the ability to convert registered users into paying users, and also the ability to retain and upgrade those paying users.

Dropbox will list on NASDAQ under the stock ticker DBX.


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