Dropbox and Salesforce Announce Partnership

Gladys Abbott
March 13, 2018

Salesforce Ventures first invested in Dropbox back in 2014.

The cloud storage company Dropbox on Monday filed to issue public stock at a valuation of roughly $7 billion, well below its valuation during its last public offering several years ago.

The company is one of a class of well-funded, closely-watched technology companies that have achieved a private valuation of more than $1 billion.

Dropbox has proposed the ticker symbol DBX for its Nasdaq listing.

Dropbox, which was valued at $10 billion in its 2014 funding round, would be one of the biggest United States enterprise technology companies to list domestically in several years. There's a chance that some companies shy away from going public if they see companies like Dropbox are valued more highly when they stay private than when they go public.

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"Dropbox is still loss making and it's revenue is not enough to justify a market value of US$10 billion".

In its regulatory filing with the Securities and Exchange Commission, Dropbox reported 2017 revenue of US$1.11 billion, up 31 percent from US$844.8 million, a year earlier. That would make the offering the largest since Snap Inc.'s IPO past year. However, these Class A shares will have limited voting power (only 2%), and most of the Class B shares (with the remaining majority voting power) will be held by co-founders Andrew Houston and Arash Ferdowsi, as well as investors Sequoia Capital, Accel, and T. Rowe Price.

While Dropbox has not turned a profit since its 2007 founding, its revenue increased more 30 percent previous year to $1.1 billion, up from $845 million in 2016. It also claims to have over 11 million paying users.

The venture capital arm of Salesforce.com Inc has agreed to buy US$100 million of Dropbox's Class A common stock in a private placement at a price per share equal to the IPO. The remaining 98 percent will accounted for by the Class B shares now held by CEO Drew Houston and other major investors.

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