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Dropbox IPOs. Its Founders Are Now Billionaires (cnbc.com)

Posted by EditorDavid on from the going-public dept.

Yesterday Dropbox finally launched its stock on NASDAQ. Reuters reports: Dropbox Inc's shares closed at $28.42, up more than 35 percent in their first day of trading on Friday, as investors rushed to buy into the biggest technology initial public offering in more than a year even as the wider sector languished... At the stock's opening price, Dropbox had a market valuation of $12.67 billion, well above the $10 billion valuation it had in its last private funding round... It has yet to turn a profit, which is common for startups that invest heavily in growth. As a public company Dropbox will be under pressure to quickly trim its losses. The 11-year old company reported revenue of $1.11 billion in 2017, up from $844.8 million a year earlier. Its net loss nearly halved from $210.2 million in 2016.
CNBC reports that Y Combinator almost passed on a chance to invest in Dropbox -- which became its first IPO ever -- "because it had misgivings about bringing on a solo entrepreneur." After Drew Houston, the creator of Dropbox, scrambled to find a co-founder in time for his in-person interview, the company was admitted into YC in 2007. Four years later, venture capitalists poured money into Dropbox at a $4 billion valuation. YC has since become a power player in Silicon Valley, helping spawn numerous companies valued at over $1 billion today including Stripe, Airbnb, Instacart and Coinbase. It also backed Twitch, which Amazon acquired in 2014 for about $970 million, and the self-driving tech start-up Cruise, which GM bought in 2016 for over $1 billion. But in its 13-year history, YC had yet to see any of its companies go public until Dropbox's stock market debut on Friday...

Houston is now worth over $3 billion and co-founder Arash Ferdowsi owns shares valued at more than $1 billion.
Dropbox's Twitter feed posted a video from their NASDAQ debut, adding "We're so thankful for the 500 million registered users who helped us get here."

69 comments

  1. As long as it by bobstreo · · Score: 1

    stays free, I'll keep my family videos and recopies on it.

    If (when) they become greedy and charge me, I'll just move someplace else.

    I don'f totally hate dropbox, at least I can use it on all my platforms. Their linux support was good at first, now it kinda sucks.

    1. Re:As long as it by svanheulen · · Score: 2

      You should look into MEGA: https://mega.nz/ I've found their Linux client to be very reliable and MEGA has end-to-end encryption so they can't read your files like Dropbox can.

    2. Re:As long as it by Anonymous Coward · · Score: 0

      Now that it is public, it is a question of when they will start charging (or load it up with advertisements).

    3. Re:As long as it by Anonymous Coward · · Score: 0

      free services will no-doubt be scaled back.

      shareholders above all else from here on.. before ipo it was all about inflating the user count.

      but the problem with charging for online storage space is... microsoft is in the same game. they essentially give away office to onedrive subscribers, and they already charge less than dropbox.

      i guess the idiots that inflated dropbox's ipo didn't get that memo. clouds evaporate. and this one WILL.

    4. Re:As long as it by Paradise+Pete · · Score: 1

      If (when) they become greedy and charge me

      Charging for a service is your definition of "greedy"?

    5. Re:As long as it by jouassou · · Score: 1

      If you want a free alternative at some point, you could also look into Syncthing. I moved from Dropbox to Syncthing a few months ago, and have been very satisfied so far; it's decentralized, secure, and easy to setup. In my case, I also ended up with an always-on Raspberry Pi with an external harddrive in the same role as Dropbox' central server: a machine that's always available for syncing and that runs daily backups.

  2. Billions for a file server by Anonymous Coward · · Score: 4, Insightful

    Looks like no one learned from the dot com boom. This along with all the Kentucky Fried Cryptocurrencies is why I don't trust geeks with money.

    1. Re:Billions for a file server by Anonymous Coward · · Score: 0

      NFS, now with GUI!

    2. Re:Billions for a file server by Anonymous Coward · · Score: 0

      Of course no one learned. Most of these silicon valley tossers were in grade school during the dot com bust.

      "This time it is different"

  3. Worry by Anonymous Coward · · Score: 0

    I use Dropbox to store some of my stuff.

    Does anyone remember how before IPO, Google reflected the "don't be evil" ideas of Page and Brin? And shortly after IPO, they had this privacy destroying tool and changed their motto to "do the right thing [for the shareholders]"?

    Does anyone suppose Dropbox is going to abandon even pretending to care about privacy, and possibly start abusing their customers openly like Microsoft? (Microsoft's abuse of customers using their cloud storage solutions has been well documented on /.) Is this plausible?

    1. Re: Worry by Anonymous Coward · · Score: 0

      Dropbox already appointed Bushâ(TM)s National Security Advisor, Condoleezza Rice, to their board. How much more warning do you want that Dropbox is Spook central?

  4. Yes, you should worry! by DontBeAMoran · · Score: 1

    Stop storing your files on someone else's servers!

    --
    #DeleteFacebook
    1. Re:Yes, you should worry! by Anonymous Coward · · Score: 0

      Hi, original AC here.

      Legitimate question: How do I safely backup files (as in, if my house burns down, for example) without depending on some 3rd party like Dropbox? If there is such a way, I'd really like to know.

    2. Re:Yes, you should worry! by spire3661 · · Score: 1

      You put a backup HDD at a realtive's house. Or a safety deposit box, or Iron Mountain..

      --
      Good-bye
    3. Re:Yes, you should worry! by bobstreo · · Score: 2

      You put a backup HDD at a realtive's house. Or a safety deposit box, or Iron Mountain..

      ( would probably go with a NAS setup with a secure connection from my home and appropriate incrementals/snapshots of things I couldn't just download or rip again..

      Dropbox is where I share stuff, and I really DGAF about security.

    4. Re:Yes, you should worry! by svanheulen · · Score: 2

      Use a service with end-to-end encryption like MEGA. Most services like Dropbox, OneDrive, and Google Drive can read your files. It would be even better to encrypt locally before uploading to a cloud service but that can be a pain on devices like phones and tablets.

    5. Re:Yes, you should worry! by thegarbz · · Score: 1

      Stop storing your files on someone else's servers!

      Why? Those other people are far better at looking after your files than 99.9% of the population out there. In other news I also get my car serviced at a mechanic, pay for someone to wire my house, and keep my money in a bank.

      Someone else's server is no different than any other specialist service I* pay for.

      * Note I use Seafile on my own server with a decent 290/40 connection that I backup regularly and store offsite. This is also a solution that won't suite 99.999% of people (even more so than the 99.9% I pointed out above).

    6. Re:Yes, you should worry! by spire3661 · · Score: 1

      You want a physical/logical break for your backups. An 'inline' NAS is not backup.

      --
      Good-bye
    7. Re:Yes, you should worry! by joe_frisch · · Score: 1

      Depends. Putting sensitive information on someone else's servers is risky, but there is a lot of information that is NOT sensitive. I use dropbox extensively as a convenient way to access files from multiple locations and to share files. I only put files there that I woudln't mind becoming completely public. I'm really not worried if someone steals the slides for a talk I've already given in public, or gets my vacation photos.

      My secret plans for world domination don't go on dropbox.

    8. Re:Yes, you should worry! by demonlapin · · Score: 1

      Encrypt the hell out of them.

    9. Re:Yes, you should worry! by ColdWetDog · · Score: 1

      I use Dropbox and, to some extent, iCloud. Anything important gets encrypted locally. Yeah, its a bit of a PITA on an iPhone but I'm rarely, if ever, looking at my tax returns on a cell phone.

      For smaller files or discrete bits of information that I do want on my mobile devices I use 1Password.

      If it's *really* sensitive, it stays on a thumb drive in my gun cabinet.

      If it's *really, really* sensitive, I just forget it.

      --
      Faster! Faster! Faster would be better!
    10. Re:Yes, you should worry! by svanheulen · · Score: 1

      Honestly there's nothing these days that doesn't fall into at least the "important" category. Even something as simple as a photo will probably get put into a facial recognition database if uploaded unencrypted.

    11. Re:Yes, you should worry! by Anonymous Coward · · Score: 0

      use end to end encryption, but make sure it is anything BUT MEGA. the only thing you can be certain with that fucked up service is that it is poorly handled and highly watched.

    12. Re:Yes, you should worry! by david_thornley · · Score: 1

      A backup is a copy that won't likely go away for the same reason the original won't. There are no backup systems that are totally reliable and will function in a major thermonuclear war or after a really large asteroid strike. Dropbox gives me geographical redundancy, if nothing else.

      --
      "When you have eliminated the unacceptable, whatever is left, however improbable, must be the truthiness" - Holmes
  5. Why would anyone do this? by slashmydots · · Score: 5, Insightful

    I have a real question for y'all. Why would anyone with plenty of income and no immediate expense to expand basically turn control of all major decisions over to random Wall Street assholes and rich, stuck up individuals that only care about money? Then every single corporate decision has to go through them and they end up ruining your company like for example EA. Just get a damn private or bank loan if you need funds. Having "investors" scrutinize everything I do would be the worst nightmare and the last option I'd ever consider if I started a company.

    1. Re:Why would anyone do this? by CrankyFool · · Score: 3, Informative

      You don't seem to know how public corporations work. Specifically, "every single corporate decision" does not have to go through the shareholders or the board of directors -- the very very vast number of them are below notice for that group.

    2. Re:Why would anyone do this? by Luthair · · Score: 1

      Depends on what portion they floated and what type of shares were sold. Zuckerberg for example holds (held?) 16% of Facebook but 60% of the votes.

    3. Re:Why would anyone do this? by mapkinase · · Score: 2, Informative

      >Having "investors" scrutinize everything I do would be the worst nightmare and the last option I'd ever consider if I started a company

      People have a billion (or two) reasons to give up control.

      --
      I do not believe in karma. "Funny"=-6. Do good and forbid evil. Yours, Oft-Offtopic Flamebaiting Troll.
    4. Re:Why would anyone do this? by AmazingRuss · · Score: 1

      Because your company doesn't make a profit, and never will. Why not stick those assholes with that sinkhole?

    5. Re:Why would anyone do this? by thegarbz · · Score: 1

      Then every single corporate decision has to go through them and they end up ruining your company like for example EA.

      Sure that's one example, now with over 4000 publicly listed companies in the USA, care to name 3999 others? I'm sure we can play a game where we can name a privately own company that was driven into shit for every publicly owned one. Though we may be here for a while.

      Just get a damn private or bank loan if you need funds.

      I see you've never had to raise capital before.

    6. Re:Why would anyone do this? by Anonymous Coward · · Score: 0

      The founders didn't have as much control as you think. Y-Combinator got their hooks into them early, and then over the years they took in more and more VC money. The decision to go public was made by the investors, not the founders, who like most YC outfits, are really just employees of YC who happen to have a lot of stock options in the companies they started.

    7. Re:Why would anyone do this? by Anonymous Coward · · Score: 0

      Writing is on the wall dude. They're cashing out.

      Google Drive, MS OneDrive, Apple iCloud Drive - everyone has a cloud drive baked into their products now. Drop Box is going to flame out sooner or later.

    8. Re:Why would anyone do this? by JohnnyBGod · · Score: 1

      You seem to have missed the summary. "Its Founders Are Now Billionaires". This is why.

    9. Re:Why would anyone do this? by gravewax · · Score: 1

      Dropbox like all these companies is still haemorrhaging money faster than a cheap B grade movie zombie. This is basically a free payday. What would you rather, take a billion dollar payday or keep losing hundreds of millions In the the hope that one day it becomes profitable?

    10. Re:Why would anyone do this? by Anonymous Coward · · Score: 0

      Where the fuck did you get "plenty of income" from? they are still losing money by the dump truck load every quarter.

  6. the story of startups by Reverend+Green · · Score: 2, Interesting

    1. Fedgov prints a bunch of free money out of thin air, calling it "Quantitative Easing"

    2. Fedgov gives that free money to their friends / "campaign contributors" in the big banks

    2. The big banks bid up every asset they can find, but still have piles and piles of free money sitting around.

    3. Big banks can't figure or anything else to do with all that free public money - so they start giving a bunch of it to the bankers' inbred, half-wit cousins who run VC firms in Palo Alto

    4. The VCs discover they've been given more money than they can possibly waste on hookers & blow. So they hire a few of their butt-buddies from the Stanford dorms to found some "startups".

    5. The butt-buddies look at what other loss-making companies are doing, then do the same thing only with an even stupider company name.

    6. No business acumen, nor any actual talent, are required to get a leadership role at a startup. You just have to be from the "right schools". Consequently the startups have no business model and not much ability to execute. But hey - at least this time they didn't pay "outrageous" salaries to a bunch of filthy working class nerds!

    6. The startups make a handsome loss, undercut and bankrupt a few legitimate businesses, and keep on getting bigger and bigger valuations each time they return to the VC teat to suck more free public money.

    7. Somewhere way up the food chain, someone in DC or New Jack City gets a little nervous about propping up so many worthless loss-making "startup" companies.

    8. The steady stream of free public money starts to dry up

    9. The Crash!

    10. Somewhere in Palo Alto, a Stanford boy can no longer afford his Personal Ass Sanitation Assistant, and is forced to resume wiping his own butt.

    1. Re:the story of startups by Anonymous Coward · · Score: 0

      A million times this!

  7. Re:domain name lottery winners by Anonymous Coward · · Score: 1

    nope, dropbox was a cool idea. I hosted my apps there till they allowed direct linking. Nowdays I use gdrive, icloud and onedrive too. I'm not mad at dude, I used his bandwidth when it was premium. Now he cashes out, good for him.

  8. Dropbox is still around? by Anonymous Coward · · Score: 0

    Haven't heard anyone talk about that site or share a link to it in at least five years...

    1. Re:Dropbox is still around? by Anonymous Coward · · Score: 0

      Why is there always some douche posting this "are they still around" comment in every story about a tech company?

      You just heard about it so STFU.

    2. Re:Dropbox is still around? by Anonymous Coward · · Score: 0

      Amazing to notice that you are still around.

  9. Sure by Anonymous Coward · · Score: 0

    10+ year old companies are "startups".

  10. Billionaire is bad by Anonymous Coward · · Score: 0

    It would not be good to be a billionaire.

    Basically you become a target. You aren't a person anymore.

    seriously it would not be a good life

    1. Re:Billionaire is bad by ThosLives · · Score: 1

      It's more astonishing to think of what having a billion dollars as an individual means. Think about this. The median income for a person in the US is something like $50k (rounding to make math easy). A billion is one million thousand. So a billion dollars is twenty thousand years of median income. It's an absurd amount of money for an individual.

      I'm generally not in the "limit people's wealth" camp, but it starts getting strange to think that it's reasonable for any individual to have wealth equivalent to more that even, oh, say, 1000 years of income.

      --
      "There are a dozen opinions on a matter until you know the truth. Then there is only one." - CS Lewis (paraprhase)
    2. Re:Billionaire is bad by Anonymous Coward · · Score: 0

      Depends on what you do with your money. There are plenty of things one cannot buy with a billion dollars.

      You shouldn't look at money in a relative way. You could instead look at the world as "what if everyone could spend a billion dollars of today's value?".

    3. Re:Billionaire is bad by King_TJ · · Score: 1

      Strange? Well, maybe -- unless you start thinking about the way people's desires change along with increased wealth.

      Say you earn that median $50,000/yr. income, but you get a big raise to $100,000/yr. It seems like a BIG deal at first, but you can use up the entire difference just by moving into a new home. So say you find a new job and again double your income? Not only does your higher tax bracket take a bigger chunk out of your take-home pay than you used to give up, but you'll again, pretty easily use up the extra income with such things as deciding to drive around nicer cars, and likely spending more time with groups of people who earn more money too -- and have expectations you'll spend more on outings with them, donations to associations they're involved in, etc.

      If you're at the point where you've got a BILLION dollars at your disposal? You're probably going to be interested in tackling appropriately sized projects.... Starting new foundations to research something, perhaps?

      I guess what I'm saying is ... whether people give their government enough money so it has billions to spend on things, or individuals manage to amass that kind of wealth themselves? The results probably aren't all that different. Either way, they're definitely going to live a much fancier lifestyle than most of us ... but they're also going to realize that they've got so much income, they can't even realistically just spend it on themselves. People are aware they have that kind of money, and they have a lot of expectations for them to try to live up to. SOME people have no conscience ... but MOST people actually do. They tend to care about SOMETHING. Maybe for them, it's trying to cure an illness that caused the death of a loved one? Or maybe they're fascinated with some aspect of science and technology that they can really advance with the money?

    4. Re:Billionaire is bad by thinkwaitfast · · Score: 1

      You can't buy much with a billion dollars other than a business or mega yacht. You can buy an all gold Lambougini, but in the end, it's still a car.

  11. Wireshark by Anonymous Coward · · Score: 0

    If you like Dropbox, monitor your network connection when it is idle. That should change your mind.

  12. ...not one cent for metadata? by Anonymous Coward · · Score: 0

    This is a retarded comment from someone who hasn't the faintest clue how to build something like Dropbox.

    Everyone intelligent has left this site, and it's just trolls keeping the lights on.

  13. Irony of YCombinator by Anonymous Coward · · Score: 0

    Run by libertarians but doesn't want solo innovators. Lol.

  14. Personal enrichment transcends all priorities. by Anonymous Coward · · Score: 0

    Personal enrichment transcends all priorities.

  15. WTF! by Anonymous Coward · · Score: 0

    Reinvent FTP badly and become worth a billion dollars?! Crazy!

    1. Re:WTF! by jouassou · · Score: 1

      Comparing Dropbox to FTP, is like comparing Facebook to email, and comparing Google to grep. I mean, at some level those analogies all work; but most people use these in completely different ways. In Dropbox' case, you have some people that use it solely like FTP (push a backup of your pics to a central server), but I think most people use it to just automatically keep their work available and up-to-date between all their computers and phones without manual pushing and pulling.

  16. They got that wealth voluntarily. by Anonymous Coward · · Score: 0

    Firstly, it's not really what they're worth; that's a fake number derived from multiplying the share price by the number of shares they have, essentially.

    Secondly, such money represents decision-making power; people handed them that much decision-making power over society because people think they are good at making decisions with society's resources. If that bet turns out to be wrong, then they will lose their decision-making power, and if that bet turns out to be good, then they will probably gain even more decision-making power.

    Yeah. It is absurd for most individuals to have that kind of decision-making power; that's why most individuals do not ever get anything near that amount. Some individuals, though, are worthy of it, and the whole point of the Free Market is to do things like find such people.

    1. Re:They got that wealth voluntarily. by j-beda · · Score: 1

      Yeah. It is absurd for most individuals to have that kind of decision-making power; that's why most individuals do not ever get anything near that amount. Some individuals, though, are worthy of it, and the whole point of the Free Market is to do things like find such people.

      Hahahahahahahahahahahahahahah, oh you are so funny.

      If you really think that the billionaires of the world have magically be selected by "the Free Market" as being "worthy" of this type of decision-making power, you are not really living in the same world as the rest of us.

      Sure, I can believe that they might be, on average, a bit smarter or more competent than "the rest of us", but the biggest difference is one of good fortune. Being in the right place at the right time with the right skills could in theory be something that a brilliant person could plan, but for the most part the differences between those with "regular" success and those with "amazing" success are purely luck.

      "Outliers" by Gladwell does a pretty good job of examining some of these issues.
      https://en.wikipedia.org/wiki/...

  17. Libertarianism doesn't imply rugged individualism by Anonymous Coward · · Score: 0

    I don't get the joke. Libertarianism doesn't imply rugged individualism; rather, libertarianism implies voluntary interaction.

  18. Legaized MegaUpload? by SigIO · · Score: 1

    Legaized MegaUpload?

    1. Re:Legaized MegaUpload? by Anonymous Coward · · Score: 0

      Legaized MegaUpload?

      not really, Megauploads was purely about piracy and doing their best to game the rules to allow users to continue to pirate. DropBox while it can be used for piracy certainly isn't trying to bill itself as a piracy hub and actually takes action against those that are pointed out to be pirating.

  19. How does RIAA feel about this? by Anonymous Coward · · Score: 0

    New source of revenue?

  20. Revenues? by sonamchauhan · · Score: 1

    "The 11-year old company reported revenue of $1.11 billion ..."

    They have revenues? How? Who pays them a billion a year?

    1. Re:Revenues? by Anonymous Coward · · Score: 0

      oooh..oooh...can I play?
      Guess 1 - It's an N.S.A. honeypot funded by the government?
      Guess 2 - They sell your harvested information to advertisers?
      Guess 3 - They blackmail users storing illegal material?
      Guess 4 - They're cooking the books and don't have any revenue at all?
      I'd love to know who in their right mind is storing their private files on some shitty cloud service when storage comes at about 5 cents/GB.

  21. Straw man by Anonymous Coward · · Score: 0

    Look it up.

  22. startup? by Anonymous Coward · · Score: 1

    dropbox is 11 years old, but is still called a startup?

  23. Re:domain name lottery winners by Anonymous Coward · · Score: 0

    Isn't it essentially a variant of NFS?