Salesforce (NYSE: CRM) is the king of cloud computing.
Its success has catapulted the company’s valuation to $92 billion . . and has encouraged companies like Microsoft (NASDAQ: MSFT) to move their apps to the cloud.
Salesforce has acquired 49 companies to secure its dominant position. And now it’s getting ready for another major investment.
Salesforce plans to invest $100 million in the Dropbox IPO next week.
Dropbox was founded in 2007 by students at the Massachusetts Institute of Technology.
The company got early support from a technology incubator called Y Combinator in Boston.
Dropbox provides a simple solution for securely storing computer files in the cloud. Whether you’re storing business critical files – or personal photos – Dropbox can be the solution.
What are the benefits?
First, the files can be accessed from ANY computer that’s connected to the internet. Second, this provides a backup of files in case you lose your computer or the hard drive crashes.
There’s been huge growth in data. And that’s created a big opportunity for Dropbox.
To help get their idea off the ground, the founders had moved to San Francisco in 2007. And within a month, they’d raised $1.2 million from venture capital investors.
Like most “tech unicorns,” Dropbox has financial backing from top-tier venture capital firms. They included Sequoia Capital and Accel Partners.
More recently, Wall Street firms including Goldman Sachs, JP Morgan and Blackrock have gotten in on the action.
In total, Dropbox has raised $1.7 billion from investors. The latest equity financing was completed in 2014 at a $10 billion valuation.
Dropbox IPO: Updated Plans
Today, Dropbox provided detailed updates on its IPO plans.
The company expects to issue shares for $16 to $18. The IPO could raise $648 million in equity, valuing Dropbox at $7.5 billion.
This transaction marks a “down round” from the last equity financing. Within the last year, we’ve seen several tech unicorns that have lowered valuations for IPOs.
This isn’t a reason for concern. Instead, it’s a reflection of the overheated private market for tech companies. The lower IPO valuation gives new investors a better entry point.
The company plans to go public and begin trading next week (click here for details). The stock will trade on the NASDAQ with the ticker symbol DBX.
Dropbox is the real deal. Over 11 million paying users count on Dropbox for backing up their data.
That demand fueled a 31% increase in sales last year. Revenues totaled $1.1 billion.
Will SalesForce Acquire Dropbox?
Last week Salesforce and Dropbox announced a strategic partnership.
Today, the updated Dropbox S-1 filing with the S.E.C. indicates that Salesforce is investing $100 million in the Dropbox IPO.
Salesforce has a history of making big acquisitions. In 2013 the company acquired ExactTarget for $2.5 billion. And in 2016, it acquired Demandware for $2.8 billion.
Time will tell whether this partnership and $100 million investment is the start of a bigger deal.
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