I’d love to hear both from insiders and others about how the company is doing (please don’t share anything confidential): — Has the announced focus on B2B panned out on the business front? — Have collaboration products succeeded? (Eg Paper) — Is DB well positioned to compete with GSuite, Office, Box etc? — Is the revenue growth rate still around 30-40%? What’s the valuation that employees believe in? — Had the addition of COO Dennis Woodside had the expected impact? (Had he hired capable VPs below him?) — What’s the hold up on the IPO? Aren’t employees sick of waiting? (It would seem in 2018 the company will have finally grown into its 10B valuation). — How’s the culture? Is there a sense of urgency / hustle? In general, it seems to me that DB has concluded it needs to be more B2B centric, but the pace of execution has been slower than I’d expect (perhaps the opposite problem of Uber - too little hustle; consider hiring a few good Uber folks? :) (Note: I am considering a role at DB which is B2B focused, but also generally curious about this as a case study).
Their infrastructure is very very good, meaning the quality of what they do is significantly higher than competitors now. But no, their collaboration products haven’t taken off. And google or Microsoft could invest and crush them if they wanted. Switching costs are high so they will stay around forever but I don’t see where there is real growth potential.
Will they get acquired? Wouldn’t it be an interesting acquisition for Amazon, Google or Microsoft?
Even if they are making the 1 billion in revenue as they announced is their run rate for this year, they cannot IPO at a 10 billion valuation. My guess would be in the 6x to 8x multiplier to revenue range. So that makes it 6-8billion.
They were at 1B in Jan17. Will be 1.5B by summer18.. by then could be 10B at 6.7x multiple. But even that’s quite rich...so perhaps by end of 2018 they IPO.
Focus is on B2B now. Nobody knows what the hold up is at this point with IPO. Box went IPO a while ago and has since caught up to their previous valuation. Company is hitting yearly and quarterly goals for the most part so not sure. Company is still focusing on the right things, but is good at moving quickly and pivoting when necessary.
My uneducated guess is: 1/ They want enough of a growth story figured out - ie B2B; 2/ They need to get to 10B valuation or bad things happen (needs 1.5B revenues to be safe).
I agree. I mentioned the 7x multiple but forgot to mention that it's mostly for pure software companies like Salesforce etc. With cloud storage there's also huge infrastructure costs so I'd imagine that the multiple would be slightly lower. Although, if you have amazing growth like say Rubrik, then the 8x multiplier makes more sense.
Going under
Box is trading at 4.7X 2018 revenues...probably what Dropbox will be valued at at IPO... SaaS median is only 6x these days https://www.bvp.com/strategy/cloud-computing/index
Thanks for sharing that. Seems like it'll be more like the 7B to 9B valuation range if they have an ARR of $1.5 billion next year. I bet no one will share this but I wonder what their renewal rate is for contracts with enterprises.
So glad someone posted this! I've been considering DROPBOX too. Following this...