The Dropbox IPO is finally happening

Angelica Greene
February 24, 2018

Dropbox, one of the first cloud-based file-storage services to gain traction among consumers and businesses, has filed to go public with the release of its S-1 statement Friday. "Over the past decade, we've largely accomplished that mission", the IPO's prospectus summary notes, "but along the way we recognised that for most of our users, sharing and collaborating on Dropbox was even more valuable". The company hopes its IPO will give it the cash it needs to beat out rivals that also offer cloud documents, storage, and collaboration (like Box, Microsoft, and Google), as well as retain the individual users that have fueled most of Dropbox's growth.

Dropbox put out word in 2016 that encrypted user IDs and passwords of some 68 million clients stolen four years earlier were freshly leaked online.

Drew Houston, chief executive of Dropbox, helped found the company in 2007, initially naming it Even Flow after a song of the same name by the rock band Pearl Jam.

Dropbox has done very well over the past two years.

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According to its IPO prospectus, Dropbox now has 11 million paying subscribers (and 500 million registered users on the service).These subscriptions now account for 90% of the company's $1.1 billion in revenue.

The big question is whether the company will achieve the $10 billion valuation it raised in the private markets.

The company said it has 500 million registered users, 100 million of whom have signed up since the start of 2017, but only 11 million paid users.

Still, the company lost $112 million last year - though that figure has been improving year over year. The company said it generates average revenue of $111.91 per paying user. The main underwriters for the offering are Goldman Sachs Group Inc. and JPMorgan Chase & Co., though the filing lists many other participating banks: Deutsche Bank Securities, Allen & Co.

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