Dropbox is all set for its initial public offering. Due to this, it has set the terms that puts the value at $8 billion. Moreover, the company has also announced a $100 million private placement by Salesforce Ventures.
On a fully diluted basis, the valuation of the company is 20 percent below the $10 billion level the company was able to achieve in its last private funding round back in 2014. However, if we look at a non-diluted basis, the valuation is around $6.7 billion, which is close to the market capitalization that the company will achieve when shares will be traded in the forthcoming week. The venture arm of Salesforce had previously participated in the Series C round of funding of Dropbox.
In a recent S-1 report filed by the cloud-based platform provider, the company plans to sell 36 million class A shares at a price band of $16 to $18. The company is issuing 27 million shares, while the current investors, including the co-founders Drew Houston and Arash Ferdowsi, will be selling 9 million shares.
If we look at the midpoint of the range, the IP of Dropbox will be around $612 million, which is by far the second largest tech offering after Snap. Class A shares will represent 2 percent of the voting power, while Class B shares — held by Houston and Ferdowsi as well as Sequoia Capital and T. Rowe Price — will account for 98 percent.
Furthermore, the company has also disclosed a reverse stock split of 1.5 to 1 for current inside investors. With this technique, the company set up a higher per-share price without causing any disruptions in economics of its previous owners or the organization in entirety.
Dropbox will be listed on the Nasdaq exchange under the symbol DBX.