Dropbox Sets IPO Target Valuation at $7 Billion to $8 Billion

Spotify last valued at $20 billion has a high bar to leap over when it holds its IPO

Spotify last valued at $20 billion has a high bar to leap over when it holds its IPO

The financial markets have eagerly been awaiting the initial public offerings of the so-called unicorn companies. Salesforce's venture arm had also invested previously in Dropbox's Series C funding round, data provided by Crunchbase show.

Here are a few tidbits about the Dropbox IPO. Including restricted stock units, the valuation would be about $7.6 billion. On Monday, it set an estimated range of $16 to $18 per share for the offering.

Business Insider (BI) said Dropbox plans to list 36 million shares in its upcoming IPO.

Dropbox, which crossed 1 million users mark in 2010, now has 500 million users across 180 countries. The cloud storage firm said its free Basic plan is the main vehicle for drawing in new paying customers.

In its regulatory filing with the Securities and Exchange Commission, Dropbox reported 2017 revenue of US$1.11 billion, up 31 percent from US$844.8 million, a year earlier. The company posted revenue of $1.1 billion on a net loss of $111.7 million. Dropbox has been cash flow positive since 2016.

Another issue worth noting is that Dropbox has a massive group of underwriters. Goldman Sachs, J.P. Morgan, Deutsche Bank, Allen & Company, BofA Merrill Lynch, RBC Capital Markets, Jefferies and Macquarie Capital are the joint bookrunners on the deal.

Existing shareholders include many well-known names in the technology world, as well as funds managed by Sequoia Capital, Accel, Green Bay Advisors, T. Rowe Price and more.

At the midpoint of the range, Dropbox's IPO would be $612 million, the largest tech offering since Snap (NYSE: SNAP) went public a year ago.

The Class A shares carry one vote each, while its Class B shares carry 10 votes each. The latter company is both an investor in Dropbox and an important partner, with the two having announced a collaboration just last week to tighten the integration between their services. That being said, preliminary checks have already indicated that demand from investors for Dropbox shares will be strong.

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