Morning Report: Let’s examine the new Dropbox valuation and try to understand what it means for the popular unicorn.
Things are moving in Dropbox’s direction this week ahead of the firm’s IPO. The cloud storage unicorn is expected to price tomorrow evening and commence trading Friday morning.
Indeed, according to a new filing, the company’s new IPO share price range is $18 to $20, up from $16 to $18. Given the firm’s expected, full share count after its offering Dropbox would be worth $7.85 billion and with its greenshoe offering $7.96 billion. Both those figures were calculated using the $20 per share figure.
(Note: While the media agrees that the non-diluted value of Dropbox will land around $7.85 billion at the upper end of its share price range, some have calculated a fully-diluted value of around $9.0 billion.)
Dropbox could still price above or below that mark, but to see the firm raise its price target implies strong demand for its shares. Indeed, the company’s IPO is reportedly oversubscribed.
So what can we learn from this? Mostly that what happened to Box isn’t bringing Dropbox down. Indeed, according to Yahoo Finance, Box has a price-sales multiple of 6.1, calculated on a trailing basis. With its new $7.9 billion valuation, Dropbox would be worth about 7.2 times its trailing revenue.
It’s a premium, albeit a small one. However, it’s worth noting that Box has largely recovered from its post-earnings shellacking. Just in time, really, for Dropbox to go public. In this environment, Dropbox now looks less expensive, comparatively, than it did when Box shares fell under $19 per share earlier this month. They are now back over $22.
The Dropbox pricing dance also comes as MuleSoft found a large exit to Salesforce, but we’ll get to that next.
For now, it’s a good day for Dropbox and its various shareholders. If it can carry the momentum through to early trading, the company could wind up within spitting distance of its 2014 valuation.
From The Crunchbase Daily:
- Salesforce will pay $6.5 billion to acquire MuleSoft, a provider of enterprise software for connecting applications, data and devices. The deal provides a 36 percent premium over the recent public valuation of San Francisco-based MuleSoft, a former venture-backed unicorn that carried out one of the most successful IPOs of 2017.
- Silicon Valley VC firm Khosla Ventures is looking to raise $1.4 billion across two new funds, according to securities filings. One will be a $1 billion fund investing across stages, while the other will be a $400 million fund focused on seed deals.
- Former Uber CEO Travis Kalanick will reportedly be taking on a new role as CEO of City Storage Systems, a startup focused on redevelopment of distressed real estate. In conjunction with the move, Kalanick’s fund will invest $150 million to take a controlling interest in the company.
- Across the Midwest, the amount of money being invested in startups is on the rise, even though deal volume is down markedly. A Crunchbase News analysis finds Chicago and Minneapolis generate the most investment and deals, but other metro areas are moving up the ranks.