Data storage firm Dropbox files for IPO of up to $500 million

FILE PHOTO: The Dropbox app logo seen on a mobile phone in this illustration photo October 16, 2017. REUTERS/Thomas White/Illustration

Data-sharing business Dropbox Inc on Friday filed for an initial public offering of up to USD 500 million with the U.S. Securities and Exchange Commission.

The San Francisco-based company, which started as a free service to share and store photos, music and other large files, 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.

It plans to have its common stock listed on Nasdaq under the ticker symbol "DBX."

In its regulatory filing, Dropbox reported 2017 revenue of USD 1.11 billion, up 31 percent from USD 844.8 million a year earlier. The company's net loss narrowed to USD 111.7 million in 2017 from USD 210.2 million in 2016.

"With over a $1 billion 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, which has 11 million paying users across 180 countries, said that about half of its 2017 revenue came from customers outside the United States.

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.