Dropbox seeks to hire IPO underwriters

SAN FRANCISCO: Data-sharing business Dropbox Inc is seeking to hire underwriters for an initial public offering that could come later this year, which would make it the biggest US technology company to go public since Snap Inc, people familiar with the matter said on Friday.

The IPO will be a key test of Dropbox’s worth after it was valued at almost $10 billion in a private fundraising round in 2014.

Dropbox will begin interviewing investment banks in the coming weeks, the sources said, asking not to be named because the deliberations are private.

Several big US technology companies such as Uber Technologies Inc and Airbnb Inc have resisted going public in recent months, concerned that stock market investors, who focus more on profitability than do private investors, would assign lower valuations to them.

Snap, owner of the popular messaging app Snapchat, was forced to lower its IPO valuation expectations earlier this year amid investor concern over its unproven business model.

Its shares have since lingered just above the IPO price, with investors troubled by widening losses and missed analyst estimates. It has a market capitalisation of $21 billion. Still, for many private companies, there is increasing pressure to go pubic as investors look to cash out. — Reuters