Dropbox’s much-anticipated initial public offering has been priced at between $16 and $18 per share, valuing the cloud storage company well below the valuation it received during its last round of private financing.
In an amended prospectus, Dropbox said Monday it will sell 36 million shares to raise $648 million as “DBX” on the Nasdaq exchange. The pricing of the IPO values the company at between $7 billion and $8 billion, making it the biggest tech IPO since Snap last year.
But in 2014, Dropbox was valued at $10 billion when it raised $350 million in venture capital funding.
“The company could always perform unusually well when trading opens — a 40 percent to 60 percent ‘pop’ on opening day would lift the company back up to its prior valuation — but that’s a big gamble,” Recode said, adding that “shareholders will most likely see the value of their shares fall” when trading begins.
Dropbox, which was founded in 2007, registered for an IPO last month, calling itself a pioneer in the worldwide adoption of file sync and share software. It has more than 500 million users in more than 180 countries and reported around $1.1 billion in revenues in 2017, up from $845 million the previous year.
As TechCrunch reports, the offering could be “a bellwether for the fortunes and fates of many other outsized startups that many have also expecting to list,” including Spotify and Airbnb.
Snap’s IPO has been something of a disappointment and, according to TechCrunch, Dropbox “presents a challenging picture.” While the company “has helped bring the concept of cloud storage services to the masses,” the publication said, only around 11 million of its customers are paying users.
“Does Dropbox have a big plan for how to convert more people into paying users? And will its investors have the patience to watch its business models play out?” TechCrunch asked.
Dropbox has gotten a vote of confidence from one major investor, announcing Monday that Salesforce will purchase $100 million of its shares in a private placement that will occur immediately after the IPO closes.