Dropbox files for its IPO, guess who’s getting rich?
Calling itself an “information sharing platform*,” Dropbox filed for its long anticipated initial public offering with the U.S. Securities and Exchange Commission this afternoon. Having registered under the ticker NASDAQ:DBX, the company hopes to raise as much as $500 million. The actual IPO could happen as soon as mid-March. (Some Dropbox executives recently positioned themselves for pretty nice payouts, more about this later.)
Dropbox’s unofficial road show starts Monday when the company is expected to host an invite only show-and-tell event that will feature some of the company’s business and enterprise clients explaining why Dropbox’s file-synchronization and sharing solution is such a great fit for them.
By that time analysts and media will have had the opportunity to comb through its S-1, which we will cover in more detail later.
A high level view
- Dropbox had $1.1 billion in revenue for 2017, compared to $845 million for 2016 and $604 million for 2015. For comparison, Dropbox’s closest independent competitor, Box, has yet to post a full year with revenue over $500 million.
- Dropbox has been cash flow positive since 2016, something that its smaller , but formidable, rival Box has not been able to achieve on a consistent basis.
- Dropbox is moving toward profitability. It lost nearly $112 million in 2017, $210 million in 2016 and $326 million in 2015.
- Dropbox claims 500 million registered users in 180 countries, but only 11 million are paying for the service.
- Half of Dropbox’s 2017 revenue came from customers outside the United States.
- Dropbox was valued at $10 billion in its 2014 funding round, something that could be hard to reach now. If it grows at the same rate as in 2017, its valuation would probably be around $7–8 billion.
Who’s getting rich?
- Dropbox’s new engineering chief, Quentin Clark, was not only given a $340 thousand sign-on bonus when he joined the company last August (on top of his $400 thousand base salary), but he was also granted shares valued at $34.1 million in September. They’ll vest over five years as long as he remains on the job. (There’s also a $260 thousand yearly cash bonus related to hitting certain targets.)
- Dropbox’s co-founder and CEO Drew Houston received restricted shares worth $109.6 million just prior to the filing. His co-founder Arash Ferdowsi, was handed stock worth $46.7 million. The aforementioned are tied to clearing share price hurdles from $20–60 over the next decade.
- Houston owns 25.3 percent of Dropbox’s available shares which, under today’s estimated value, are worth $1.9 billion.
- Sequoia Capital owns 23 percent, valued at $1.7 billion.
- Box CEO Aaron Levie and his stockholders are enjoying a bump too. Box shares rose 2.8 percent after Dropbox’s prospectus was released on Friday.
*How Dropbox is perceived by investors could be a game-changer. Collaboration is hot, file-sharing is not.
