Dropbox has been helping people around the world store and sync files for about a decade. It was pretty much an immediate hit in the tech industry after it launched in 2007. This is because it solved the very important problem of how to store files efficiently, securely, and in a way that enables trusted people to share files with one another.
The Dropbox brand has been steadily growing since 2007, and it is now very well-known in the cloud storage space. Dropbox Business has over 300,000 teams that use it, including Kayak, Under Armor, Yahoo, and National Geographic. In addition to racking up famous clients, Dropbox has also been recording very high revenue amounts. For example, in 2017, the company brought in $1.1 billion in revenue.
Now, Dropbox has decided to go Public, and will be launching an IPO in an attempt to raise roughly $500 million. Dropbox will trade under the symbol DBX. With its DBX stock, Dropbox will be the largest US tech company to go public since Snapchat. The two cofounders of Dropbox, Drew Houston, and Arash Ferdowsi both own large percentages of the company. Houston, who is the CEO, owns 25 percent of Dropbox. Ferdowsi, who is the former CTO owns 10 percent.
Another large percentage of ownership is held by Sequoia Capital. Sequoia owns roughly 23.2 percent of Dropbox. So, when the Dropbox ICO is launched, Houston, Ferdowsi, and Sequoia could all make substantial amounts of money if the market pushes the Dropbox stock upward. However, it is yet to be seen whether or not this will happen.
How does Dropbox make money?
Dropbox uses a “freemium” model. Freemium models are used by many tech companies, and they essentially work by allowing users to access a free version. Then, if the users like the free version, they have an option to upgrade to a premium version for a fee. Dropbox has roughly 500 million users. Of these users 489 million only use the free version. However, the remaining 11 million users use the premium version.
11 million users out of 500 million may not seem like a significant amount, but these 11 million users have helped Dropbox to reach a valuation of around $7-10 billion. So even though 489 million of Dropbox’s users do not pay any money whatsoever to the company, the ones that do help to generate extremely high amounts of revenue. Dropbox’s revenue has also been steadily growing for the past three years, which is a good indication that it could continue along this trend. This is especially true considering the fact that an IPO can help the company to fund further grow. So, positive things could be on the horizon for Dropbox and for people who invest in the Dropbox IPO.
Despite the fact that Dropbox provides a service that is very popular, it also has some serious competition from major companies such as Apple, Alphabet, Microsoft, and Amazon. All of these competitors have stronger brand recognition and more resources than Dropbox. However, these competitors also all of many other products to focus on besides cloud storage. The fact that Dropbox can devote its full attention to its cloud storage and file editing software is a competitive advantage for the company. This could be part of the reason why Dropbox continues to grow steadily despite the intense competition.
The Dropbox IPO is one of the most significant tech IPOs in the past two or three years. This IPO has the potential to gain a lot of positive attention for Dropbox, which could help to fuel growth. Cloud storage, file syncing, and collaborative file editing are things that are not likely to go away any time soon. In fact, there could very well be an increased need for it as businesses come to depend on digital file storage more and more in the future.
So, Dropbox could prove to be a good investment for people who get in at the IPO level. The Dropbox stock price is reported to be launching at around $16-$18 a share. If there is massive interest in the IPO, then it could quickly drive prices above the $20 mark. However, it is very difficult to tell which way the stock will go after it is launched. Whichever way it goes, investors will soon be able to purchase shares of Dropbox.