Dropbox sets IPO price range, to sell stake to Salesforce

There are 19 pre-IPO decacorns at present and many are watching with bated breath to see how Dropbox will perform, particularly in the aftermath of Snap's IPO in March 2017 and the volatile results that followed. The company was previously valued at $10 billion, following a 2014 funding round. Including restricted stock units, the valuation would be about $7.6 billion.

On a nondiluted basis, the company is valued around $6.7 billion, which is a closer comparison to what the company's market capitalization will be when the shares begin trading next week.

The gap between private valuations and public market aspirations highlights the disconnect between the premium that private investors put on potential innovation, and the financials-based analysis that public market shareholders are focused on.

Dropbox, which was valued at $10 billion in its 2014 funding round, would be one of the biggest USA enterprise technology companies to list domestically in several years.

Cloud data service Dropbox aims to raise as much as $748-million (R8.83-billion) through its initial public offering and a private sale of stock, according to an updated securities registration filed on Monday.

Salesforce and Dropbox are expanding their strategic partnership, integrating the customer relationship management (CRM) software vendor's platform with the cloud storage vendor's collaboration platform. That technique essentially allows Dropbox to set a higher per-share price in its IPO without changing the economics of its previous owners or the company as a whole. The company is issuing 27 million shares, while current investors, including co-founders Drew Houston and Arash Ferdowsi, are selling 9 million shares. The company will sell $100 million worth of shares to Salesforce.com's venture arm at the same time of its IPO.

Dropbox company has touted its business as a path to unleashing creative energy and inspired work.

Dropbox claims more than 500 million users in more than 180 countries, but the less-good news is that only about 11 million are paying for the privilege.

While Dropbox has not turned a profit since its 2007 founding, its revenue increased more 30 percent a year ago to $1.1 billion, up from $845 million in 2016.

(Copyright © 2015. All Rights Reserved.)
 
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