Dropbox files for IPO as market competition increases

Dropbox files for IPO as market competition increases

Dropbox files for IPO as market competition increases

Their shares will vest if Dropbox's stock achieves a series of price hurdles ranging from US$20 to US$60 within a decade of the offering's close, the filing said.

A host of other firms invested in Dropbox in 2011 at a $4 billion valuation and need a significant post-IPO rally to get much of a return.

In a filing with the Securities and Exchange Commission on Friday, Dropbox said it planned to raise up to $500 million in the offering, and meant to use the money for a variety of purposes, including potential acquisitions. In 2016, Dropbox said it had 500 million users and 150,000 Dropbox Business users, so while overall user growth is stagnant, more companies are paying for its product.

One of the world's largest online services for backing up documents, photos and videos is opening its files in an initial public offering (IPO) of stock.

In its IPO filing with the US Securities and Exchange Commission, Dropbox said it has 11 million paying subscribers out of 500 million total registered users in 180 countries. Many startups have become huge in terms of revenue but have held off going public longer than startups traditionally have because they've been able to raise large amounts of private cash. Part of its success will be measured relative to Box, which went public in 2015 and will be considered a comparable. But as Dropbox matured over the years, it shifted its focus to business customers, and has since debuted paid versions of its online storage service as well as work collaboration software meant to make it more attractive to companies.

Dropbox is popular among individuals users who like the simplicity of the company's cloud storage products, but it has struggled to make inroads in the enterprise space. "A majority of our registered users may never convert to a paid subscription at our platform", the startup warned. But Dropbox's move is impressive in part because CEO Drew Houston once took a risk by turning down an offer from the one and only Steve Jobs. Some 300,000 teams also use its beefier Dropbox Business service, which starts at $12.50 a month for teams of three users. Average revenue per paying user was $112 in 2017, just a 1 percent increase over 2016. The company employed 1,858 people as of the end of 2017.

The listing will be led by Goldman Sachs Group and JPMorgan Chase & Co. The company will trade on Nasdaq under the symbol of DBX.

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