Dropbox filed for an initial public offering today with the aim to raise $500 million for its cloud-based file storage and collaboration service. It had secretly filed to go public in early January.
The San Francisco-based company brought in $1.1 billion in revenue last year, with a net loss of $111 million. It has more than 500 million registered users, with more than 11 million paying users. The company’s last private valuation was $10 billion. Dropbox’s annual revenue has grown significantly year-over-year, while the company has also managed to slash its losses from nearly $326 million in 2015.
Investors and the tech industry will be watching the results of this offering closely, considering that it’s the first big tech IPO of 2018. Dropbox is heading into a potentially choppy market, too: stock prices have been on a roller-coaster ride over the past several weeks, though the market has rebounded significantly from lows earlier this month. It will also be interesting to see how Dropbox fares on Wall Street compared to Snap’s disappointing performance over the last year.
Dropbox has plenty going for it with investors. Its model of attracting paying consumer users through a pair of premium plans alongside business sales has generated a ton of revenue, as well as potential up-sell opportunities going forward. The company’s revenue growth rate has begun to slow, however.
One of the company’s most interesting risk factors is the shifting state of net neutrality regulation in the U.S. Because Dropbox relies on speedy network connections to provide its customers with the data they need, the company points out that internet providers implementing usage-based pricing or speeding up competing offerings could negatively impact its business.
It will be interesting to see how this offering compares to Spotify’s reported plans to directly list itself on the New York Stock Exchange. That will be the first time a tech company of its size chooses to avoid a traditional IPO process and instead publicly list its shares without issuing any new ones.
Story developing, more to come.
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