US-based data storage and collaboration platform Dropbox will float in a $756m initial public offering on the Nasdaq Global Select Market today, alongside a $100m investment by enterprise software provider Salesforce.
The company will issue 36 million shares it priced at $21 each yesterday, giving it an $8.22bn market cap. Sources told Reuters last week the offering was oversubscribed, and Dropbox lifted its range from $16 to $18 a share, to $18 to $20 earlier this week.
Founded in 2007, Dropbox has developed a cloud-based file storage and collaboration platform with more than 500 million registered users, more than 11 million of which are paying subscribers.
The company almost halved its net losses from $210m to approximately $112m in 2017, while increasing revenue from almost $845m to more than $1.1bn. It will use $213m of the proceeds from the offering to repay money owed through a revolving credit facility.
The IPO comes after some $600m in equity funding, in addition to $1.1bn in debt financing. Dropbox most recently raised $350m from Allen & Company, Goldman Sachs, Morgan Stanley, Sequoia Capital, BlackRock and T. Rowe Price in a 2014 round that valued it at $10bn.
Salesforce has confirmed its Salesforce Ventures unit is among Dropbox’s backers but has not revealed the details of its investment. Its stake was sized at less than 5% pre-offering, and the 4.76 million shares it bought in the placement equate to a share of 1.2% in the company.
Sequoia Capital, the venture capital firm that led Dropbox’s $1.2m seed round in 2007 at a reported $5m valuation, and its $6m series A the following year at a $25m valuation, is the company’s largest shareholder, though its 23.2% stake will be diluted slightly to 21.4%.
Dropbox’s other notable shareholders are VC firm Accel, which joined Sequoia in the 2008 round, and which has a 4.5% stake post-IPO, and T. Rowe Price (3.2%).
The company’s other investors include Index Ventures, which led its $250m series B round in 2011 at a $4bn valuation, Benchmark, Greylock Partners, Institutional Venture Partners, Glynn Capital Management, Queensbridge Venture Partners, RIT Capital Partners and Valiant Capital Partners.
Y Combinator invested $15,000 in Dropbox in 2017 prior to the seed round, but sold half its stake as part of the series B round, a person with knowledge of the deal told Recode this week. It remains the only time the accelerator has sold stock in a secondary transaction.
Goldman Sachs and JP Morgan Securities are joint lead bookrunning managers for the IPO while Deutsche Bank Securities, Allen & Company, BofA Merrill Lynch, RBC Capital Markets, Jefferies and Macquarie Capital are joint bookrunning managers.
Canaccord Genuity, JMP Securities, KeyBanc Capital Markets and Piper Jaffray round out the underwriters as co-managers for the offering. The underwriters have a 30-day option to but another 5.4 million shares, which would increase the IPO’s size to $869m.