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Cloud company Dropbox Inc. has reportedly filed for an initial public offering (IPO) in private, raising speculations that the online data storage provider might just become the latest tech group to go public this year.

Sources familiar with the matter said that the San Francisco-based business made the confidential IPO filings with the US Securities and Exchange Commission (SEC) and expects to go public before the end of March.

Major American financial firms, Goldman Sachs Group Inc. and JPMorgan Chase & Co. are believed to be in charge of the potential listing.

Sources said that both companies already worked closely with Dropbox some time ago. Goldman had counseled the company on previous funding rounds and has extended its credit, while JPMorgan headed a credit line of $600 million to Dropbox last year.        

Spokespersons for Dropbox, Goldman Sachs and JPMorgan did not comment on the IPO plan.

Dropbox IPO Outlook

Dropbox has been one the most valuable tech businesses that remains privately held. If the deal does turn out successful, it would be the first notable tech listing this year as well as the most valuable tech IPO since the offering of social media company Snap Inc. last year.

Dropbox could also be one of the largest US tech companies to list domestically in recent years, joining other major tech corporations planning to go public in the country.

Having achieved a $10 billion valuation in 2014, hopes for the data-sharing business to go public rose further, pressuring the company to wait until it believes it could reach or close in on the market cap of the stock market.

Dropbox’s chief executive Drew Houston stated last year that it was cash flow positive, with annual sales of more than $1 billion. However, this still does not confirm that the business is profitable on a net basis yet.      

Venture capitalist Venky Ganesan said that an IPO by the file storage and sharing company would be seen as a forerunner for start-ups, provided that they are able to realize the need to grow out of what he described as the Peter Pan state of mind.

Dropbox Might Surpass Box if it Goes Public

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Probably the big questions now are whether Dropbox will be able to start selling shares higher than its last valuation, how will it be valued by public markets if it goes public, and what kind of valuation it is going to manage as a public company.

For the third question, closest point of comparison is its cloud storage rival Box Inc., which went public in 2015 and has since seen shares climb more than 50 percent.

Box has traded about six times its sales in the previous year, raising its market capitalization at around $3 billion.

If Dropbox were to go public with a $10 billion valuation and a sales of $1 billion, it could acquire a 10x revenue multiple. Box had an 8x multiple during its 2015 offering.  

Dropbox might also point out that its larger user base and confidence on word of mouth to attract potential customers should indicate that it is valued higher than Box.

As of August, Dropbox currently has 500 million users, with 200,000 businesses in storing and sharing documents online through its cloud service. Box reported that it gained 57 million users as of the quarter ending October 31.

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