File sharing and storage solutions company Dropbox is on the cusp of having one of the largest tech IPOs in recent years. According to a filing on Monday, the eleven-year-old software provider is seeking $648 million for its public debut at a value around $7.4 billion.
Dropbox heads off against some of America’s most powerful tech titans, including Apple, Google, Microsoft and Amazon, who have all launched rival services for digitally storing documents, photos and other files. Its main rival, Box, with a market capitalization at around $2.76 billion, went public in 2015. In the IPO paperwork, the San Francisco, Calif.-based company indicated that it only expects competition to intensify.
The firm lists 500 million registered users across 180 countries, and serves over 150,00 businesses with Dropbox Business. Most of its customers use its free service, while about 11 million pay for additional services. The company has raised about $1.7 billion in seven funding rounds from investors including Index Ventures, Sequoia Capital, private equity giant BlackRock, and JPMorgan Chase & Co., according to Crunchbase.
Dropbox’s IPO has been widely tracked as it is seen setting a precedent for the valuations of other anticipated public offerings. Its IPO price, at about two-and-a-half times that of Box, reflects an approximate 30% discount from the $10 billion valuation the company earned in early 2014 after a financing round led by BlackRock. At the time, new investors were increasingly dumping money into startups in efforts to secure better returns than they could on the public markets.
A spike in investments over the past few years has resulted in swelling valuations, often for companies that remain unprofitable, such as on-demand ride sharing behemoth Uber Technologies Inc. Dropbox’s IPO price signals that while venture financing remains historically high, valuations are stabilizing in the U.S.
Also this week, it was announced that CRM leader Salesforce will buy $100 million in Dropbox stock on the eve of its IPO, in a separate private placement. Many on the Street are speculating that the unusually high investment from Salesforce’s venture arm signals a forthcoming acquisition.