Dropbox listing plan puts value at $8.6b-plus

Silicon Valley darling Dropbox is aiming to go public at a valuation of US$6.3 billion to US$7.1b ($8.6b-$9.7b) in its initial public offering, according to documents filed this week.

The company is one of a group of well-funded, closely watched technology businesses that have achieved a private valuation of more than US$1b. Investors wanting to get their hands on the next big thing piled into these so-called “unicorns” in recent years, helping drive up valuations.

San Francisco-based Dropbox is aiming to raise as much as US$648 million in its US IPO, by marketing 36 million shares of Class A common stock for US$16 to US$18 apiece, according to the filing with the US Securities and Exchange Commission. At the high end of that range, it would be the third-biggest US IPO from an enterprise technology company in the past three years, according to data compiled by Bloomberg.

Dropbox also agreed to sell US$100m in stock to Salesforce.com’s venture capital arm in a private placement concurrent with the IPO, the filing shows. Last week, the companies announced a partnership to integrate and sell Salesforce’s customer relationship management technology with Dropbox’s storage and collaboration tools.

Chief executive and co-founder Drew Houston will hold 22 per cent of the shares outstanding after the offering. Arash Ferdowsi, co-founder and director, will hold 8.8 per cent. The pair started Dropbox in 2007.

Sequoia Capital, an early Dropbox investor, will own 21.1 per cent.

Dropbox has touted its business as a path to unleashing creative energy and inspired work. The company says it has more than 500 million registered users, with 11 million of those paying for added features.

The company is inching closer to profitability, and in its deal prospectus, Dropbox outlined its focus on getting more of those users to pay up. Investors are sure to have questions for the file-sharing technology leader as it embarks on its marketing roadshow.

The company’s revenue increased more than 30 per cent last year to US$1.1b, from US$845m in 2016. In the same period, the company’s net losses shrank to US$112m from US$210m.

Dropbox plans to list on the Nasdaq Global Select Market under the symbol DBX.