Published: Tue, March 13, 2018
Economy | By

Dropbox sets IPO Target Valuation up to $8 Billion

Dropbox sets IPO Target Valuation up to $8 Billion

Tech company Dropbox is set to be valued at $7bn (£5bn) at its initial public offering (IPO) next week, according to regulatory documents filed today.

That's after the storage company disclosed Monday that it would sell new shares at between $16 and $18 a share, meaning Dropbox would be valued at around $7 billion at the high end of the range. On a fully diluted basis including stock options, the mid-range of the IPO price range gives the company a market capitalisation of around United States dollars 7.4 billion. The IPO's target price range is already poised to put Dropbox well below the $10 billion valuation that it received after its last funding round.

Dropbox, an online storage and collaborative working platform, filed to register 36 million shares in an initial public offering that will see it listed on the Nasdaq Global Select market, according to a prospectus. That would make the offering the largest since Snap Inc.'s IPO past year.

The company did not specify an exact date to launch its IPO, but once Dropbox does go to public, it will enter a highly competitive market. Also, Salesforce Ventures has invested in Dropbox since 2014. As the company's executives and their advisers begin to crisscross the country in a series of meetings, their goal is to convince would-be buyers that its stock will perform more like Facebook's, which has risen enormously in recent years, and less like Snap Inc.'s, whose stock is down 34 percent since its debut.

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 reported revenue in 2017 of $1.1 billion, up 31% from the previous year. It generated net losses of $325.9 million, $210.2 million, and $111.7 million in 2015, 2016, and 2017, respectively.

Goldman Sachs Group Inc., JPMorgan Chase & Co., Deutsche Bank AG and Allen & Co. are leading the offering.

The company is now losing money.

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