File-hosting service Dropbox to go public with $500 million offering

File-hosting service Dropbox Inc. has filed with the US Securities and Exchange Commission to raise up to 500 million US dollars in a public offering.

In its filing, the San Francisco-based company reported 2017 revenue of 1.11 billion US dollars, up 31 percent from 844.8 million US dollars a year earlier. The company’s net loss narrowed to 111.7 million US dollars in 2017 from 210.2 million US dollars in 2016.

The company, which has 11 million paying users across 180 countries, started as a free service to share and store photos, music and other large files.

It competes with much larger technology firms such as Alphabet Inc.’s Google, Microsoft Corp. and Amazon.com Inc as well as cloud-storage rival Box Inc. and plans to have its common stock listed on Nasdaq under the ticker symbol "DBX."

Traders working on the floor at the closing bell of the Dow Industrial Average at the New York Stock Exchange, February 22, 2018, in New York.

“With over 1 billion US dollars in revenues it speaks to Dropbox’s success over the past few years and is an impressive number in a fertile space,” said Daniel Ives at research firm GBH Insights. “Dropbox’s business model has scaled successfully.”

The company’s biggest challenge is explaining to Wall Street what differentiates Dropbox from its many competitors, Box chief executive Aaron Levie told Reuters on Friday.

“If Dropbox continues to focus on their user experience, they’ll be able to compete successfully for consumers and professionals,” Levie said.

Dropbox said that about half of its 2017 revenue came from customers outside the US.

Goldman Sachs & Co., JPMorgan and Deutsche Bank Securities are some of the leading underwriters for the IPO.

The amount of money a company says it plans to raise in its first IPO filing is usually a temporary placeholder.

(REUTERS)