Dropbox has always had a flair for the dramatic. Its CEO and co-founder Drew Houston, for example, appeared on a YouTube clip in 2012, belting out “Rocket Man” with a pint in hand at a Swiss bar—just one of several bravura performances. The company’s offices in San Francisco—replete with swings that dangle from the ceiling, a full bar and a recording studio—are among the most decadent. And, of course, Dropbox has garnered attention for raising an incredible $257 million in funding during its five-year journey.
Well, let the trumpet players play because Dropbox plans on raising even more money and continuing on with its lavish ways. Dropbox will look to raise $250 million more in the next few weeks, according to two people with knowledge of the company’s plans, who asked not to be identified because the discussions are private. The company, these people say, seeks a valuation north of $8 billion, or more than double its last round, which closed in Oct. 2011. Dropbox’s past investors include Sequoia Capital, Accel Partners, Y Combinator, and more flamboyant types like U2’s Bono and The Edge.
“What we can say is that with over 200 million users and 4 million businesses, Dropbox has continued and strong momentum,” says Ana Andreescu, a Dropbox spokeswoman, when asked about the funding round.
Houston recently bragged that Dropbox had yet to spend all of the money taken in during its last funding round. The company, however, could use a cash infusion to fuel its growing ambitions. It started out as a consumer play, and has since looked to expand its presence with businesses, which tend to be more willing to pay for the file synchronizing and storage service. Earlier this month, Dropbox rolled out new services aimed at businesses, which give a company’s IT administrator a centralized spot to manage security and legal settings.
While Dropbox’s consumer business spread via word of mouth, the corporate business will require a dedicated sales team and new technology. That means Dropbox will need to spend money acquiring pricey salespeople and engineers and likely to acquire various bits and pieces of software. Increasingly, Dropbox will also be going up against the likes of Microsoft (MSFT), Google (GOOG) and Amazon.com (AMZN) and fellow start-ups like Box that have been honing their corporate technology for years. So, it’s in a bit of catch-up mode.
Box has raised $312 million to date, while dozens of other file-sharing and collaboration start-ups have together raised billions of dollars. There’s little proof yet that any of these companies are profitable or capable of outflanking giants like Microsoft and Google.
Of all the start-ups, though, Dropbox has seemed to enjoy the most meteoric growth. It just reached 200 million users—or about 10 times as many people as it had at the end of 2010. Its revenue has grown 20 fold since late 2010 and is now in the “hundreds of millions of dollars” per year range, say the people familiar with Dropbox’s funding plans.
Word of the valuation will certainly draw attention in Silicon Valley, which has officially reached froth status. In October, online scrapbooking site Pinterest, which makes no revenue, raised $225 million in a financing round that valued it at $3.8 billion. Last week, stories surfaced saying that SnapChat, which has no revenue model in sight, turned down a $3 billion cash offer from Facebook. And then there’s Bitcoin, the favored digital currency of technophiles, that has once again seen its value soar. That said, Dropbox seems to fit more into the category of start-ups like Palantir and Workday in that it makes something customers want—and is able to sell that something for actual money.