Published: Mon, March 12, 2018
Finance | By Claude Patterson

Dropbox and Salesforce Announce Partnership

Dropbox and Salesforce Announce Partnership

According to a Bloomberg calculation, the transaction would value Dropbox at $7.1 billion, less than its $10 billion value during a prior private capital raising effort in 2014.

In addition to that, Dropbox announced that it will be selling $100 million in stock to Salesforce - its new integration partner - right after the IPO, "at a price per share equal to the initial offering price".

The company first confidentially filed for an IPO at the start of the year.

Dropbox expects its debut price to be between $16 and $18 per share, the company said in a filing.

On the plus side, the company has helped bring the concept of cloud storage services to the masses.

The company had 11 million paying users and over 500 million registered users on December 31, 2017-just over 2% of its registered users pay Dropbox for the service. Existing shareholders, including founders Drew Houston and Arash Ferdowsi, will offer another 9.2 million shares for sale, and the underwriters have an over-allotment option for 5.4 million more shares.

The San Francisco-based company reported $1.1 billion in revenue a year ago, with a net loss of $111 million.

The company's net loss narrowed to US$111.7 million in 2017 from US$210.2 million in 2016.

So, wasn't there already a partnership between Salesforce and Dropbox?

Users of Salesforce Quip will also get access to Dropbox stored content, such as videos, slides and photos, through the cloud service. Salesforce has staked its whole business model around cloud services - its ticker may be "CRM", but its logo is its name inside a cloud - and it's passed into the pantheon of tech giants with flying colors. Salesforce's venture arm had also invested previously in Dropbox's Series C funding round, data provided by Crunchbase show.

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