If you are enjoying the mobile app called Dropbox, you know how it makes your day easier. Other people want this to happen in a much bigger way and are backing up their desires with cold hard cash.
The ability to have your “stuff” wherever you are is big business. Thanks to the mobile revolution and an idea from Drew Houston, Dropbox was created. Now they have attracted enough attention to begin talking with investment banks. Some of their former buyout offers could be considered spectacular, but have not been accepted. The offers were in the two billion dollar range. The potential investors they are talking to are Allen and Company, a bank known as a “boutique investment bank”. The amount of money that Dropbox is valued for is in the range of $5 billion dollars, up from $7 million at their last valuation.
Dropbox has more than 25 million users. Not all of them are on the same level as subscribers because the Dropbox service has free as well as paid levels. The free level is generously given two gigabytes of storage space. The levels go up to 100 gigabytes which sell for $19.99 per month. If you compare that with having to use a MicroSD card and transferring files to all your devices, the advantage is easy to see. Dropbox not only saves time, it saves money by not needing a MicroSD card.
The next round of cash infusion that Dropbox is looking for will be in the $200 to $300 million range. This will give them more than 40 times the money of their first “Series A” funding. This cash came from Y Combinator, Sequoia Capital, Accell Partners and some personal investors. Now that Dropbox has joined the “billion dollar club”, it ranks them on the level with such companies as Square, Spotify, AirBNB, Foursquare and the Gilt Group.
The recent security scare from Dropbox does not seem to have affected their value. An update gone awry caused any password to be the right password for all user accounts recently. For four hours the problem persisted before being corrected. This earned Dropbox a class action lawsuit, even though less than 100 people were affected. At least one person was exploiting the vulnerabilities at the time it happened.
The Dropbox company is now expecting big things from their new valuation. The program works across iPhones and other iProducts, Android devices and Blackberry smartphones.
