Mega-float looms for Drop­box

The Weekend Australian - - THE WALL STREET JOURNAL - ELIOT BROWN JAY GREENE

Web stor­age com­pany Drop­box has con­fi­den­tially filed to go pub­lic, in what stands to be one of the largest tech IPOs in the past few years.

The of­fer­ing, ex­pected in the com­ing months, would mark a rare move among a class of richly val­ued tech start-ups that have put off IPOs with am­ple amounts of cap­i­tal still flow­ing in from gi­ant in­vest­ment firms such as Ja­panese firm SoftBank.

Last year, 26 US ven­ture­backed tech com­pa­nies held IPOs, ac­cord­ing to Dow Jones Ven­tureSource, and few of them aside from so­cial me­dia com­pany Snap in­volved prom­i­nent start-ups. More than 100 US com­pa­nies val­ued at $US1 bil­lion ($1.3bn) or more pri­vately are still on the side­lines, in­clud­ing ride-hail­ing firm Uber and home-rental com­pany Airbnb.

Eleven-year-old Drop­box, which lets users and busi­nesses store and man­age files on­line, has strug­gled to meet the ex­pec­ta­tions of its lofty $US10 bil­lion val­u­a­tion reached when it raised pri­vate cap­i­tal in 2014.

In­vestors from top ven­ture­cap­i­tal firms such as Se­quoia Cap­i­tal and Ac­cel Part­ners as well as mu­tual funds in­clud­ing Fidelity In­vest­ments and T Rowe Price col­lec­tively pumped more than $US600 mil­lion into the busi­ness, view­ing it as hav­ing enor­mous po­ten­tial to dominate the con­sumer busi­ness of file stor­age.

But over the past few years, Drop­box has been out­flanked by tech gi­ants like Google and Ap­ple that rushed into the con­sumer­stor­age space, forc­ing it to shift its fo­cus to of­fer­ing stor­age for busi­nesses.

This shift has al­lowed Drop­box to build a large busi­ness with $US1bn in an­nu­alised rev­enue.

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