San Francisco based tech company, Dropbox, has filed for an initial public offering of up to $500 million with the US Securities and Exchange Commission. The company, which started as a free service to share and store photos, music, and other large files, competes with much larger technology firms such as Google, Microsoft, and Amazon, as well as cloud storage rival, Box. It plans to have its common stock listed on Nasdaq under the ticker symbol “DBX.”
In its regulatory filing, Dropbox reported 2017 revenue of $1.11 billion, up 31% from $844.8 million a year earlier. The company’s net loss narrowed to $111.7 million in 2017 from $210.2 million in 2016. Dropbox now has close to 11 million paying users spread across 180 countries. The company said that about half of its 2017 revenue came from customers outside the United States.
“With over $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 from research firm GBH Insights. “Dropbox’s business model has scaled successfully.”
Goldman Sachs & Co, JPMorgan, and Deutsche Bank Securities are some of the leading underwriters for the IPO. The company is continuing the tech tradition of dual-class shares, which will concentrate power in the hands of its two co-founders and early investors. The Dropbox prospectus even allows for a potential third class of shares with zero voting power. The move raises the question of whether Dropbox will be included in stock indices that have recently started cracking down on dual-class share structures.
“The company’s biggest challenge is explaining to Wall Street what differentiates Dropbox from its many competitors,” Box chief executive Aaron Levie said on Friday. “If Dropbox continues to focus on their user experience, they’ll be able to compete successfully for consumers and professionals.”