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Confirmation Of Dropbox's Monster Raise

Feb 24 2014, 5:16pm CST | by

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Confirmation Of Dropbox's Monster Raise

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Confirmation Of Dropbox's Monster Raise

According to a new SEC filing, cloud file sharing vendor Dropbox has raised a monstrous $325 million alongside an option to extend the amount raised to $450 million. The existence of this fundraising round was first reported a couple of months ago.

Dropbox and arch-rival Box are both likely to IPO this year and with this funding round putting Dropbox’s valuation at around $10B it’s going to be a fascinating process to watch. While the company claims 4 million business customers, its actual enterprise revenue is significantly less than that of Box. The company is working hard to deliver a compelling enterprise-grade product but it is hampered somewhat by it’s laser focused consumer origins and overarching focus on keeping its UI simple at all costs – this sometimes gets in the way of the features that enterprises need.

According to FortuneAllen & Company and Goldman Sachs handled the deal and earned $8.25 million for their work, according to the filing.

According to the filing, Dropbox’s 2013 revenue was some $200M. If this figure is accurate it’s very interesting since a recent IDC report which looked at relative market and revenue shares across the different vendors estimated Dropbox’s 2012 revenue at some $46M. Either Dropbox has turned the dial signficantly on revenue in a twelve month period, or IDC’s initial analysis was flawed.

What will be even more interesting is to get a glimpse of Box’s 2013 revenue. In the same report IDC estimated their 2012 figure was $65.5M, some 50% more than the Dropbox estimate. The market assessment is that Box has significantly higher revenue than does Dropbox, if that perception is proven to be wrong it will have significant negative impacts on Box’s IPO success.

Much was made of the secrecy of Box’s IPO prospectus – many put it down to secret IPO’s being the “cool new thing” for Silicon Valley companies. if it’s proven that some of the reason was a more modest than expected revenue number, it will be a significantly more difficult sell for Box CEO Aaron Levie during the IPO roadshow.

I’ll have more information on the revenue figures as it becomes available.

Source: Forbes


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