Dropbox, Inc. will go public on March 22, after privately filing for an initial public offer with the U.S. Securities and Exchange Commission last year. After the offering, the shares of the company will start trading on the Nasdaq stock market the following day (Friday).
According to the filing, the San Francisco-based file sharing and cloud storage company has a private valuation of $6 billion making its IPO one of the most anticipated in the tech world in recent years. Dropbox plans to raise $500 million through the IPO, which is likely to be in the price range of between $16 and $18 a share.
Bearing in mind that the company is currently valued at $6 billion, and has already accumulated private investments valued at $600 million, it would be worth around $7.4 billion at the midpoint of the $16 and $18 price range. The firm could receive $530 billion proceeds and raise capital of around $612 million. The company has chosen “DBX” as its ticker symbol, and J.P. Morgan and Goldman Sachs will be its lead underwriters together with twelve other banks.
Dropbox will use the proceeds from the IPO to bring in more cloud-storage subscribers and expand third-party software integration. Even as stocks of tech companies started the week badly, the case is totally different for Drobox as there has been a lot of hype around its IPO with some sources saying that it is already oversubscribed. That goes to show that demand for its shares is very healthy making it one of the biggest anticipated IPOs in the tech industry in 2018.
Drobox was co-founded by Andrew Houston and Arash Ferdowsi (MIT graduates) in 2007. They started the company as a free service for sharing and storing music, photos as well as other large files. Today, the company competes with large tech firms like Microsoft Corporation, Amazon.com and Alphabet’s Google. Its main rival, however, is Box.
February’s filling with SEC shows that Houston will be the biggest shareholder with 25.3% of the share before Thursday’s offering. Arash Ferdowsi, on the other hand will have a stake of 10.3%. Sequoia Capital, an institutional investor that funded the company in 2007 will own 23.2%, followed by Accel and T. Rowe Price at 5.0% and 3.5% respectively.
The company made sales worth $1.1 billion in 2017, representing an increase of 31% from the previous year’s figure of $844.8 million. Net loss stood at $111.7 million, down 47% from 2016’s net loss of $305 million. Out of its total revenue last year, $576 million was generated from the United States with other countries giving the company $531 million. Dropbox said that it is only the United States that accounts for more than 10% of its total sales.
Besides its tech giant rivals, Dropbox, Inc also considers smaller software firms such as Box and Atlassian as a threat in addition to undisclosed private companies. Now that the company is going public, it is considering employing more salespersons to sell its products better to large companies.
Sources
https://www.wsj.com/articles/dropbox-files-to-go-public-1519419035
https://www.cnbc.com/2018/02/23/dropbox-ipo-form-s-1-prospectus-filing-full-text.html
https://www.nasdaq.com/markets/ipos/company/dropbox-inc-808000-86123?tab=news
