Dropbox IPO to value business at $7bn


Its venture arm, Salesforce Ventures, invests in enterprise cloud companies and it will be purchasing some $100m of Dropbox stock.

The filings also reveal that USA cloud computing company Salesforce has agreed to acquire $100m of Dropbox stock in a private placement. This will allow Dropbox to set a higher IPO price per share without causing disruption among its current investors.

Dropbox's S-1 form Dropbox that it filed with the Securities and Exchange Commission showed that it lost $111 million (£80.1 million) on revenue of $1.1 billion (£793 million) a year ago.

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In that regard, the Salesforce investment and integration, and its timing of being announced alongside the sober IPO range, is a notable vote of confidence in Dropbox. The remaining 98 percent will accounted for by the Class B shares now held by CEO Drew Houston and other major investors. That's well behind the $10 billion that it was valued at during its last round of private financing in 2014. As the company's executives and their advisers begin to crisscross the country in a series of meetings, their goal is to convince would-be buyers that its stock will perform more like Facebook's, which has risen enormously in recent years, and less like Snap Inc.'s, whose stock is down 34 percent since its debut. Besides investors, the offering will no doubt also be closely watched by other private-funded tech giants such as Uber Technologies Inc. that have signaled their intent to go public.

Having Salesforce buy into Dropbox not only shows how it's bolstering its new partner Dropbox in the next phase, but I'd argue also gives Dropbox one potential exit strategy. The company reported around $1.1 billion in revenues in 2017, representing a rise on $845 million in 2016 and $604 million in 2015. Dropbox will be listed on the Nasdaq exchange under the symbol DBX. Unlike many online publications, we don't have a paywall or run banner advertising, because we want to keep our journalism open, without influence or the need to chase traffic.