Dropbox files confidential IPO

Kelley Robertson
January 13, 2018

If Dropbox - last valued by private-market investors at about $10 billion (U.S.) - follows through on an initial public offering, it will become one of the highest-profile technology companies of late to seek a stock market listing.

The goal is to list the company within the first half of 2018, with the listing to be led by Goldman Sachs Group and JPMorgan Chase & Co., Bloomberg reported. Meanwhile, other banks will be approached this month for various roles in connection with the IPO.

Dropbox has not made a comment yet as the filing has been private.

With 500m users including 200,000 businesses, according to figures from last August, the company is a big player in the cloud storage market, but will have to prove to potential investors how its offering is different to those of Google, Microsoft and other rivals.

Unlike money-losing Snap, Dropbox will come to the table with annualized sales of more than $1 billion (roughly Rs. 6,350 crores), Chief Executive Officer Drew Houston said in an interview past year. Most tech companies have been taking advantage of this provision, then reveal their filings about 15 days before the IPO roadshow. According to the confidential sources, the company's stock is likely to trade higher after things go public. Those benchmarks are the product of more than two years of focusing the company, expanding its product suite for businesses and reining in expenses, Houston said at the time.

One big question that hangs over a potential IPO is what sort of valuation Dropbox would command as a public company.

Now Dropbox, the online file storage company that is part of Silicon Valley's closely watched pack of "unicorns", plans to try its luck. This has enabled it to speed up file transfers while also reducing costs, according to Dennis Woodside, chief operating officer at the company. Goldman Sachs advised the company on earlier funding rounds and extended the company credit, while JPMorgan led a $600 million (roughly Rs. 3,800 crores) credit line to Dropbox past year, the people said. Naturally, the investment community will want to see how the company's share price will fare in the post-IPO period.

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