DREW HOUSTON and Arash Ferdowsi must have few regrets since they turned down an offer for their startup from Apple’s then boss, Steve Jobs, in 2011. Dropbox hasn’t done too badly in the interim. It rakes in over $1bn in revenue by allowing users—500m at the last count—to store and share data in the cloud. On March 23rd it is due to go public, making it the biggest firm to do so since Snap, a messaging app, floated in early 2017. Dropbox’s range for its share price values it at between $8bn and $9bn. That will comfort other “unicorns”, the tag given to startups valued at over $1bn, that are considering listing.
True, the valuation is less than its early backers were hoping for when they valued the company at $10bn in 2014, when it last raised equity. But as Matthew Kennedy from Renaissance Capital, a research firm, points out, the previous valuation coincided with peak investor exuberance for tech firms. The adjustment may also reflect some doubts about the firm’s long-term prospects.
Its challenge, common to many...Continue reading