Dropbox, cloud storage company and tech unicorn, files for IPO

  • Dropbox, cloud storage company and tech unicorn, files for IPO

Dropbox, cloud storage company and tech unicorn, files for IPO

Depends on your point of comparison.

Dropbox will probably always be compared with Box, its file-storage rival with roots on Mercer Island that went public in 2015.

Dropbox put out word in 2016 that encrypted user IDs and passwords of some 68 million clients stolen four years earlier were freshly leaked online. Or is it more like Atlassian, the successful workplace collaboration company that offers a more friendly point of comparison for Dropbox investors?

Dropbox has done very well over the past two years. If the best point of public-market comparison is Atlassian, which has a revenue multiple of about 15, then Dropbox could be valued at over $16 billion on public markets. Reports circulated last month that Dropbox had already filed confidentially, but the paperwork is in and it's shedding some light on the file sharing company's profitability and customer base.

Going public is a huge milestone for Dropbox and has been one of the most anticipated tech IPOs for several years now. Numerous unicorns have taken big chunks of private capital to put off an IPO.

The San Francisco company claimed 500 million users in 180 countries and US$1 billion in annual revenues in documents filed with the Securities and Exchange Commission. A few details in the form do stick out-namely its growth. In 2017 it recorded $1.1 billion in revenue, up from $603 million in 2015. That's a statistic that the company acknowledges it needs to improve.

Expectedly, the company disclosed in the filing that its business depends on the ability to convert registered users into paying users, and also the ability to retain and upgrade those paying users. Similarly its losses have shrunk-in 2015 it lost $325.9 million, and in 2017 that stat hit $111.7 million. The company is generating cash, however, recording $305 million in free cash flow during 2017.