Dropbox IPO Targets Valuation Between $7B and $8B

Ivan Schwartz
March 13, 2018

Dropbox has set a preliminary price range for its initial public offering of shares, meaning net proceeds of around United States dollars 530 million for the cloud storage company.

Dropbox, the provider of a cloud-based platform that enables users to store and share content, said in a new S-1 filing that it plans to sell 36 million Class A shares at $16 to $18 apiece.

At the midpoint of the range, Dropbox's IPO would be $612 million, the largest tech offering since Snap (NYSE: SNAP) went public a year ago.

Dropbox, which was founded in 2007, registered for an IPO last month, calling itself a pioneer in the worldwide adoption of file sync and share software. The IPO's target price range is already poised to put Dropbox well below the $10 billion valuation that it received after its last funding round.

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Dropbox has proposed the ticker symbol DBX for its Nasdaq listing. Its revenue in 2017 was $1.1 billion, up 31% from the previous year.

Dropbox does have one of the complicated shares structures that have become more common of late with three classes of shares.

The number of paying users on its platform rose to 11 million in 2017 from 8.8 million the prior year, while average revenue per paying user was slightly up year on year to $111.9 million from $110.5 million. After the roadshow is complete, they will finalize the IPO price for the company's shares, using investor feedback on the price. And Salesforce has been an investor in Dropbox since 2014, so a closer relationship between the two cloud firms is not surprising. With Spotify also headed toward an IPO in the coming weeks, investors will get to render a verdict on whether private investors drove the valuations of these companies too high as the companies' sought to remain private. In the same period, the company's net losses shrank to US$112 million from US$210 million.

The Class B shares count as 10 votes per share, but the Class C shares have no voting rights.

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