Dropbox's IPO filing reveals 500M users but a $1 billion deficit

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The beloved, easy-to-use (if somewhat stagnant) file syncing service had documents unsealed at the SEC today revealing plans for an initial public offering, where Dropbox is looking to raise up to $500 million.

"With over a $1 billion in revenues it speaks to Dropbox's success over the past few years and is an impressive number in a fertile space", said Daniel Ives at research firm GBH Insights. Clark's stock vests over five years. The company will trade on Nasdaq under the symbol "DBX". Dropbox filed confidentially on October 11, 2017. The company's revenue rose to $1.11 billion last year from $845 million the year before. 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. Dropbox became cash-flow positive in 2016, but recorded a loss of $111 million that year after pouring money back into its product development efforts.

Meanwhile, Dropbox said it now has 11 million paying users, which is far less than the 500 million registered users who access its services for free.

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People familiar with the offering told the Wall Street Journal that Dropbox is expected to seek a public valuation of about $7 billion to $8 billion, making it the largest tech IPO since Snap in March 2017, but a far cry from its private valuation in 2014 of $10 billion.

Co-founder and CEO Drew Houston is Dropbox's biggest shareholder, owning 25 percent of the shares before the offering.

Dropbox's move to go public isn't all that surprising, but it is an important step for the company and the larger tech industry. 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.

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