Dropbox files for IPO as market competition increases
- Author: Sylvester Abbott Feb 25, 2018,
Feb 25, 2018, 1:49
When Dropbox first debuted, it became a hit with consumers who used it's free, online service to store their photos, music, and movies.
Dropbox is seeking to raise $US500 million ($638 million) - a U.S. dollar for each of its registered users - an order of magnitude more than the budget of The Emoji Movie, in which Dropbox was mentioned repeatedly and ham-fistedly, only to have its significance to the plot immediately stripped away by an antagonistic robot who kidnaps the film's hero, Gene Meh (TJ Miler), from the cloud.
SEC documents have been unsealed this week, revealing that Dropbox has filed for an initial public offering to the tune of $500 million.
The company is not yet profitable, having lost almost $112 million a year ago.
Meanwhile, Dropbox's net loss was $210.2 million past year which decreased and now its $111.7 million in 2017, so according to this chart company is doing a pretty good job but they chose to take their company towards a higher level.
While Dropbox has been touting its scale - with more than 500 million registered users - and the fact that it is cash-flow positive, the filing gives a more in-depth look at its financials. The company's core corporate software product Dropbox Business now has 300,000 users, the filing notes. It relies heavily on paying users, of which it has more than 11 million, and average revenue per paid user is now $111.91, up from 2016 but down from 2015. In its filing, the company name-checked Amazon, Apple, Google and Microsoft as rivals in the cloud storage space, and Atlassian, Google and Microsoft as competitors when it comes to content collaboration. Their shares will vest if Dropbox's stock achieves a series of price hurdles ranging from US$20 to US$60 within a decade of the offering's close, the filing said.
Unlike some other cloud companies that have needed to hire big sales forces to sell to large enterprise customers, Dropbox has managed to avoid that cost, at least so far. The offering could come as early as March 19. But more recently it has moved much of its infrastructure off AWS to cut down on costs. This compares to $845 million in revenue the year before and $604 million for 2015. Some 300,000 teams also use its beefier Dropbox Business service, which starts at $12.50 a month for teams of three users.
While Dropbox still loses money, those deficits are narrowing.
For much of its life, Dropbox said its product has spread by word-of-mouth.