Dropbox files for IPO as market competition increases

Dropbox files for a $500 million IPO

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Cloud storage company Dropbox has filed for a $500 million IPO. Only 11 million users pay for the premium version of Dropbox's service, a figure that the company is aggressively trying to increase. That amount is a placeholder and is likely to change.

Dropbox said Friday that it booked $1.1 billion in revenue a year ago.

It's official, the Dropbox IPO filing is here. "Imagine if every minute at work were well spent - if we could focus and spend our time on the things that matter".

Dropbox also says it has 500 million registered users in 180 countries, with 100 million having signed up since the beginning of 2017.

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While there were more than 500 million registered Dropbox users at the end of past year, only 11 million of them were paying subscribers, the firm said in the regulatory filing. The company lost $210.2 million in 2016, but only $111.7 million in 2017.

Goldman Sachs & Co LLC, J.P. Morgan and Deutsche Bank Securities are some of the leading underwriters for the IPO. The company will trade on Nasdaq under the symbol "DBX". The company said that in 2016, it was able to shrink it's cost of revenue by $35.1 million as part of its AWS migration, which it refers to as "Infrastructure Optimization". CEO Houston received restricted shares worth $109.6 million, and Ferdowsi was handed stock worth $46.7 million.

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.

The company will sell shares in a three-class structure - the same one used by Snap, which had its IPO previous year.

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The seven-year-old company spent the last year watching as its stock sunk further and further following its $3.4 billion IPO. They're not your friend.' So for us, even some of the frustrations we're seeing really validate those changes.

The three earn base salaries of $400,000 and have cash bonuses with annual targets of $260,000. Dropbox said in its filing that because these companies have bigger budgets, Dropbox will be under pressure to keep the price of its service in-line with competing services.

It shouldn't be a surprise that Dropbox and tech giant Hewlett Packard Enterprise are cozy with each other considering that former HPE CEO Meg Whitman is on Dropbox's board.

Investors and the tech industry in general will be watching the results of this IPO closely, and not just because it is the first big tech IPO of 2018. Snap Inc. gave CEO Evan Spiegel shares worth $636.6 million as the firm went public a year ago.

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