While Dropbox may not have the glamour of a ride-hailing app like Uber or a streaming music service like Spotify - both of which are likely initial public offering prospects - the company is in the same broad group known as “unicorns,” which are start-ups valued at more than $1 billion by the private investors that have so far funded their growth. On Friday, there was an answer: Dropbox, an online file storage company privately valued at about $10 billion, filed paperwork to raise up to $500 million in an initial public offering.
Morgan, Deutsche Bank Securities, Allen & Company LLC and Bank of America Merrill Lynch are among lead underwriters to the offering.In Silicon Valley and on Wall Street, it has long been a guessing game about which of the most richly valued technology start-ups would be next to test the public markets. Its full-year net loss, meanwhile, nearly halved to $111.7 million. Venture capital firm Sequoia Capital will retain a stake of about 25 percent.ĭropbox reported revenue of $1.11 billion in 2017, up 32 percent from a year earlier. “For me the biggest problem I have with Dropbox is they don’t have any unique competitive advantages or proprietary offerings that differentiate them from the pack,” said Adam Sarhan of investment advisory service 50 Park Investments.ĭropbox co-founder and Chief Executive Officer Andrew Houston will have 24 percent of the company after selling 2.3 million shares in the offering. Streaming music leader Spotify is scheduled to do a direct listing of shares on the New York Stock Exchange on April 3.ĭropbox has 500 million users and competes with Alphabet’s Google, Microsoft, and Box, which had a market value of about $3.1 billion as of Thursday’s close. “Pricing above the revised range indicates there is more demand than supply for growth technology IPOs especially those generating substantial positive free cash flow,” said Leslie Pfrang of Class V Group, an IPO advisory firm. The strong pricing bodes well for other highly anticipated IPOs from tech unicorns, or startups valued at more than $1 billion. Join today’s leading executives at the Low-Code/No-Code Summit virtually on November 9.
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