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Dropbox Files for IPO, and Other 'Unicorns' Are Watching

Dropbox Files for IPO, and Other 'Unicorns' Are Watching

The company's revenue increased more 30 percent past year to $1.1 billion from $845 million in 2016.

While Dropbox has been touting its scale - with more than 500 million registered users - and the fact that it is cash-flow positive, the filing gives a more in-depth look at its financials. Dropbox shares could begin trading as early as the week of March 19.

The filing reveals Dropbox has lost more than $1 billion since its inception. Its rivals in online file storage include three of the world's most powerful companies - Google, Microsoft and Amazon.

While Dropbox has seen significant revenue growth since it was founded in 2007, but pointed out that the rate had started to slow.

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. To compete, Dropbox is pouring money into research and development to convert non-paying users to paid subscribers, and to enhance collaborative tools. From 2015 to 2016, Dropbox saved $39.5 million in the cost of revenue bucket thanks to the project, which reduced spending on "our third-party datacenter service provider" by $92.5 million offset by increased expenses of $53 million for its own data centers.

Dropbox woos users with a free version of its online file-storing service, then entices with premium features to upgrade to paid subscriptions.

"It has always been important to me and to Arash (Ferdowsi) to create a company with a diverse team and where everyone feels welcome", says Dropbox CEO Drew Houston.

The company made public its filing on Friday, but noted that it submitted documents past year in a confidential filing with the SEC under rules for "emerging" growth companies. Obviously, lots of companies are still happy to pay AWS to manage their infrastructure, as evidenced by the steady gains the cloud market leader made in 2017.

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

The stock will trade on the Nasdaq exchange.

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