Dropbox valued at $8.2bn as much-anticipated IPO finally arrives

Above Dropbox app Image Credit Paul Sawers  VentureBeat

Dropbox priced its Initial Public Offering above expectations at $21 US per share on Thursday night, setting the stage for the software company's stock to hit the public market on Friday.

The company raised $756 million in its initial public offering, Bloomberg reported, citing someone familiar with the information. Dropbox on Thursday sold 36 million shares prices at $21 apiece.

After initially targeting a market value of only $7.1 billion, strong demand for Dropbox shares helped close the gap as its IPO priced above the marketed range.

The strong pricing bodes well for other highly anticipated IPOs from tech unicorns, or startups valued at more than US$1 billion.

Shares have started trading today and have surged as much as 50% higher than that offering price as of this writing. Popular for its cloud-based files storage and syncing service, the company was able to raise a whopping $750 million from the event.

According to its website, the company has over 500 million registered users and more than 300,000 teams are using Dropbox business.

Despite the bump in price, Dropbox's market cap is still below the $10 billion valuation that it commanded in a 2014 private funding round. It stopped bleeding cash in 2015 and maintained a positive free cash flow over the following two years.

Dropbox's foray into the public market comes at a turbulent time on Wall Street and especially for tech stocks, after Facebook's data scandal wiped almost $60 billion off the company's market cap. "It's a good sign", said Robert R. Ackerman Jr., founder and managing partner of the venture capital firm AllegisCyber.

Dropbox has made a public offering this time around.

"We've always lived in a competitive environment. and importantly all our growth has happened in that environment", Houston said. Dropbox provides file hosting services like cloud storage, personal cloud, cloud synchronization and client software.

It also makes Dropbox's IPO the biggest for a tech company since Snapchat's parent company Snap went public in March 2017. Its full-year net loss almost halved from the $210.2 million in 2016.

"If investors had bought Dropbox stock within the last six months, they'd be up over 75 percent". LLC and J.P. Morgan Securities LLC are joint lead bookrunning managers.

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