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Dropbox IPO could value company at more than $7 billion

13 March, 2018, 12:04 | Author: Shawna Walton
  • Drew Houston founder and chief executive officer of Dropbox attends the annual Allen & Company Sun Valley Conference

Dropbox on Monday offered a price range for shares in its initial public offering that would value it at up to $7.1 billion (roughly Rs. 46,000 crores), almost a third below the valuation it commanded in 2014, a clear sign of how overheated the private tech market became a few years back.

At the high end of the IPO price range, San Francisco-based Dropbox is valued at more than $7 billion, with all of its outstanding shares counted.

Dropbox, an online storage and collaborative working platform, filed to register 36 million shares in an initial public offering that will see it listed on the Nasdaq Global Select market, according to a prospectus. Dropbox and Spotify, the music-streaming giant that is planning its own listing, could presage a series of stock market debuts, eventually including the likes of Uber and Airbnb. For example, the company states that it has more than 500 million registered users, but only 11 million of them are paying customers.

At midpoint of the range, Dropbox's IPO would be approximately $612 million, the largest tech IPO since Snap Inc.

As many tech companies continue to do after going public, Dropbox is still losing money, although the $112 million that it lost previous year was an improvement from the $210 million it last in 2016. In the same period, the company's net losses shrank to $112 million from $210 million.

Going public would be the biggest accomplishment yet for Dropbox since it was founded in 2007. And Salesforce has been an investor in Dropbox since 2014, so a closer relationship between the two cloud firms is not surprising.

A Dropbox IPO is in the works and InvestorPlace has a few things that potential investors might want to know.

The company reported $1.17 billion in revenue in 2017, a 31 percent jump from 2016. Sequoia Capital, an early investor in the company, will have a stake worth more than 20 percent.

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