- After years of speculation, the Dropbox filed paperwork Friday to go public, looking to raise $500 million in its IPO, according to U.S. Securities and Exchange Commission filings. As part of the filing, Dropbox disclosed revenue of $1.1 billion in 2017 and now boasts 500 million users, of which 11 million are paying.
- Even though it has a robust user base, and users have added more than 400 billion pieces of content to its platform, Dropbox "may not be able to achieve or maintain profitability," according to the filings. The company has seen a declining revenue growth rate and has "incurred net losses on an annual basis" since Dropbox began.
- One of its major risk factors revolves around privacy and data breach concerns. Citing a data breach which was discovered in 2016, Dropbox is one of many service providers concerned with unauthorized platform access, which would negatively impact its customers and severely tarnish its reputation. As a preventative measure, the company maintains "errors, omissions, and cyber liability insurance policies covering certain security and privacy damages."
Dropbox, the market's been waiting for you.
But for many, questions persist about whether or not Dropbox can prosper as a public company. Key to its success is expanding its paid customer base and breaking into the enterprise, a space that is increasingly crowded as more collaboration solutions have emerged.
A more robust portfolio of enterprise tools has helped, but Dropbox is up against companies like Box, Amazon, Apple, Google, Atlassian and Microsoft, as the company notes in its filings. The content collaboration market is "competitive and rapidly changing," according to Dropbox, but its lack of "legacy constraints" and rapid rate of innovation will help it compete.
Big name companies can often drown out the market for more niche tools. With players like Microsoft and Google boosting content collaboration services and supporting a variety of content types, companies like Dropbox are left fighting for customers.
One of its closest direct competitors, Box went public in 2015 and has also struggled to maintain profitability. To help boost its profile, Box has heavily partnered with other organizations, such as its deal with Google on image recognition.
To date, Dropbox integrates with organizations like Microsoft, Google, Slack and Autodesk. With similar integrations and a commitment to its current open ecosystem, Dropbox will be able to create a strong foothold in the enterprise.