Dropbox went public Friday, debuting at $21 per share and closing the day up 35% with shares trading for $28.42 per share, Reuters reports. With a market cap of more than $12 billion, Dropbox marks the first big tech IPO since Snapchat maker Snap Inc. went public last year.
Dropbox twice raised the share price before going public. Initially, the company planned to trade between $16-$18 per share, but the public offering was "oversubscribed," leading Dropbox to open the market at $21 per share.
- The content management company has had to work to convince investors that it is not an organization that fits into a "traditional mold," said CEO Drew Houston, in an interview with TechCrunch. Dropbox is using the "consumer internet playbook and applying it to business software."
Though many are praising Dropbox for being the first tech unicorn to go public since Snap, the social media platform has wallowed in the market and is currently trading under its IPO price.
Dropbox, however, is in another category of technology altogether, looking toward the enterprise market for success.
Wall Street has recently shown its favor for business cloud companies — particularly with Zscaler's recent public offering. Investors are seeing the potential for enterprise providers, even if they are not quite yet profitable, as is the case with Dropbox.
While many were skeptical Dropbox would not find long-term success in the market, critical partnerships with larger vendors like Salesforce and Google are helping the company appeal to a larger market.
Now that Dropbox is public, to attain profit and maintain a place in the market (without being gobbled up by a larger vendor), the company must continue to flip freemium customers into paid seats and level the playing field with other offerings in the market.
But even with flashy new customers, Dropbox can't afford to forget its SMB roots.