Report: Dropbox seeks new funding, valuing company at $8 billion

http://www.reuters.com/article/2013/11/19/us-dropbox-funding-idUSBRE9AI01R20131119

by AhtiK • 13 years ago

66 77 13 years ago

ghshephard• 13 years ago

"Dropbox, which is increasingly competing with Microsoft and Google as well as fellow startup Box in the fast-growing field of cloud storage,"

This implicitly (if not explicitly) reverses the actuality, which is really:

"Dropbox, which is increasingly facing competition from Microsoft and Google as well as fellow startup Box in the fast-growing field of cloud storage,"

They do a better job later on with, "Those features come at a time large rivals like Microsoft and Amazon Inc are muscling into cloud-storage, a strategic weapon in an era of widespread mobile computing."

execat• 13 years ago

"zOMG. You guys are going head on against the giants? Wow. So cool."

They are probably looking at that reaction from the people who don't know the rough timeline when Dropbox, Google Drive, Microsoft's own service and Box started.

judk• 13 years ago

Steven Levy wrote about how Google Drive was built long before Dropbox, but was held back from launch due to internal political maneuvering about whether desktop files are welcome in the "cloud" world.

But yeah, Dropbox went on market first with abfully supported any-filetype local client sync, not just Office docs and photos and cloud-only videos.

InclinedPlane• 13 years ago

I have a few friends who work at Box, that company seems much better at extracting revenue from its product via concentrating on the business rather than consumer space.

seivan2• 13 years ago

Their product isn't as good, but I bet they have some amazing sales people.

Like most 'enterprise' stuff.

jonathansizz• 13 years ago

Since you're nitpicking, I'll just point out that both formulations actually have the same meaning. There's nothing (not even an implication) in the first quoted sentence that suggests that Dropbox is younger than its competitors.

'Competing with' and 'facing competition from' are exact equivalents.

venomsnake3• 13 years ago

I read "facing competition from" as being the incumbent and getting a challenge.

And "Competing with" all are on equal basis.

ultramundane828• 13 years ago

This irks me because of the absolutism in the writing voice. But I'm sure you'd say there is no absolutism present (not even an implication).

Let's leave the linguistic criticisms on this one to Frege and Russell please. I can interpret the phrasing in both your terms and in the previous commenter's terms quite easily.

shocks• 13 years ago

Every time I see Dropbox on the front page of HN I think about this[1] all over again…

1: https://news.ycombinator.com/item?id=8863

rfnslyr2• 13 years ago

That thread is hilarious, especially the first reply.

jbrooksuk• 13 years ago

I wonder how the people who replied to that thread feel now?

amit_m2• 13 years ago

What is so funny about it? I think the first reply is spot on.

In fact, one of the best things about Dropbox is that they worked very hard on removing any barriers, including making sure that it can be installed on a windows machine without requiring administrator privileges.

I am confident that a large percentage of their users would have been unable to use Dropbox had this issue not been addressed.

dcarmo• 13 years ago

"The only problem is that you have to install something."

twic• 13 years ago

Eh. I don't use Dropbox, in part because of exactly that. I passed over Spotify for the same reason. Given feature parity, I will choose a browser-based solution over one that requires me to install some random binary blob every time.

teh_klev• 13 years ago

"For a Linux user, you can already build such a system yourself quite trivially...."

That's my other favourite gem.

But in all seriousness, I wish I could use Dropbox, but sadly where I live and work my ADSL upstream speed is 448kbit/s rendering it useless for anything other than very small files.

TomJoad• 13 years ago

I've been using ownCLoud (owncloud.org) on a raspberry pi set up on my LAN to solve this type of problem. While I don't have it publicly facing, as soon as I get home, any file I was working on is synced to the rest of my computers and devices.

With docker being ported to the rasberry pi recently, I suspect it will be even simpler to set up an ownCloud for $35 + the cost of storage.

marknutter• 13 years ago

"No wireless. Less space than a nomad. Lame."

smrtinsert• 13 years ago

It's amazing how our hindsight is so clear, lets pat ourselves on the back!

I used to use dropbox, but after running in on a bunch of devices and having to learn the quirks of each implementation and its sync hassles I left it. SFTP is simple, free, ubiquitous, and the words 'conflict resolution' never come up when I use it.

NLPsajeeth• 13 years ago

"Dropbox tallied $116 million in sales last year, more than doubling its $46 million in revenue in 2011. The year before, it nearly quadrupled sales from $12 million."

http://online.wsj.com/news/article_email/SB10001424052702303...

chii• 13 years ago

i m flabbergasted at the amount of money there is in this service (and related ones) - is it really that useful? I had a dropbox account since the early days, and i have hardly put any use into it.

What do people actually use it for? Share files? Backup solution?

gabemart• 13 years ago

Most of the less-technical people I know who use it use it as a backup. The free tier can restore deleted files within a certain time period (30 days?). If you put your default file locations (My Documents or similar) inside dropbox, it works pretty well as a set-and-forget backup.

josephagoss• 13 years ago

I use it so my laptop and desktop share the same files. I can code on my laptop and once I get home I have my desktop ready to continue.

leoedin• 13 years ago

It was exceptionally useful as a student when I was frequently using lots of computers. As a sort of USB stick in the cloud (with added shared-folders) it was brilliant. The sync, versioning and useful web interface "just work".

I can completely see that if you're a small team and are faced with the problem of shared folders, dropbox would be a good solution. It's not too expensive and a lot easier than setting up reliable and secure self-hosted file storage.

homersapien• 13 years ago

Anything meaningful I do on my mobile devices - photos, files, etc. - gets backed up to Dropbox. It's 100% automatic, and has been a real life saver. I also use it as basically a virtual thumb drive to "move" files between work/home. I'm the exact opposite of you: I'm flabbergasted that people don't use it. That said, I wouldn't pay for it. There are much cheaper backup solutions (Crashplan).

weavie• 13 years ago

I use it as

- a backup. All important files, pictures go there. My phone automatically copies all my pictures to Dropbox. (although I occassionally move them over to Skydrive to keep within my limit)

- a git repository

- a way to share files between home / work / phone. (I rarely bother copying files over usb to my phone anymore. Memory sticks are gathering dust)

- a way to share files/photos with friends.

- a web server.. well more like a way to share html files with friends.

- an easy way to copy documents to Evernote (using Wappwolf)

Dropbox probably knows more about me than Google.

stblack• 13 years ago

Dropbox has been a game-changer for me.

Maybe your interactions with technical people are different, or you don't share much between computers and devices?

Here's what's changed for me:

* 1:1 collaborations with people

* m:m collaborations within groups

* Me and my web servers are so, SO in sync :-)

* Sharing downloadable links to files and folders with people.

* Also: photo sharing because sharing a link to a folder of photos auto-galleries it.

duaneb• 13 years ago

I switch computers. A lot. Dropbox makes my life much easier without any forethought.

robbiemitchell• 13 years ago

Cross-computer synching and implicit mini backup. Most of active work of any kind is saved in dropbox folders so I can pull it up anywhere. My desktop folder is replaced by a folder called "Current" on dropbox.

artmageddon• 13 years ago

I use it for both, but mostly sharing. Dropbox starts you off with 2GB but allows you to increase the size for free by referring other people, which I've been able to do. I've gotten it up to 8GB thus far. I don't rely on it to keep all of my most important data, since that goes well beyond 8GB, and I don't keep anything personally sensitive on there either. If my friends need something like pictures I've taken at a party, I'll put them on Dropbox and let them deal with it, rather than the hassle of email or setting up my own server.

While it's limiting, I like it a lot better than carrying USB sticks with me - I've lost a number of them over the when they'd eventually rip off my keychain :(

simonw• 13 years ago

Dropbox is the ideal insurance against laptop theft. If you stole my laptop right now, I wouldn't lose files that I care about.

acjohnson55• 13 years ago

Besides sharing files (for which Dropbox is great), I am increasingly symlinking folders to subfolders in my Dropbox to attain automatic synchronization between machines. It's just by far the most seamless and painless to set up solution I know of.

I recently became a paying user and I now store all my personal docs to my Dropbox. My main impediment to doing this was concern about security, but then I discovered and deployed Boxcryptor Classic (https://www.boxcryptor.com/en/boxcryptor-classic), which give me a great deal of peace of mind. It's a fully client-side, zero-knowledge file-system encryption app. I now keep all my documents in my Boxcryptor, which sits in my Dropbox.

matwood• 13 years ago

I use it for backups. Put important documents in a truecrypt volume. Copy said volume to dropbox.

For non-sensitive items like books, pdfs, etc... dropbox makes it easy to find items online and then share them across my tablets, phones, and other computers.

amit_m2• 13 years ago

Dropbox has basically replaced my homedir and nearly everything I do now goes inside (documents, photos, git repositories).

It is installed on my home laptop, university desktop, smartphone and tablet. Goodreader (a PDF reader) can sync to a Dropbox directory with PDF files. So I can quickly access all of the papers I ever saved. This is a very convenient way of overcoming ipad's terrible sync-using-itunes mechanism.

aryastark• 13 years ago

I use it to collaborate with a fairly non-technical person, where it's marginally easier to use than email. That's it. I'm actually rather horrified at the people using it for backup and git. These are stupendously bad ideas. Proper collaboration with multiple parties also dictates that some form of locking is required. Something more advanced than yelling "I got it!"

brador• 13 years ago

The problem I see is dropbox as a service becoming a commodity as competition in the sector ramps up. Apple is making a big push on cloud with airdrop and icloud, Tencent is offering 10tb storage.

It's heating up and it's gonna be hard to maintain a viable USP.

w1ntermute• 13 years ago

I don't think this is true at all. There are huge network effects because of folder sharing. I've gotten at least a dozen people to sign up for Dropbox over the years this way. It was tough at first, but the adoption rate is sufficiently high now that in a group of 5, there may be only one person who hasn't got an account already. And when they're the odd one out, the peer pressure to sign up is so great that it forces even the latest of late adopters to give in.

Apple is irrelevant because they're not cross platform, and no one will trust their data to a Chinese company, particularly the businesses that actually pay for Dropbox.

franstereo• 13 years ago

I agree there are big network effects to sharing folders and that is a big push to sign up. Paying is a different story however. If you are a casual non-business user, sharing photos or the occasional document (e.g., Grandparent use case) then even the annoying space restrictions won't move you to pay.

netcan• 13 years ago

IMO the underlying assumption of Dropbox's competitiveness is that it is not a commodity. 1GB with the right user experience is worth more than more with a worse UX. Commodity would imply that it's all about price per gb.

So far, I think that assumption has been right.

foobarqux2• 13 years ago

But how hard is it to tell an engineering team to just copy Dropbox? And then offer a lower price point or better OS integration?

prostoalex• 13 years ago

For large photo transfers I've convinced my family members to use BitTorrent Sync.

Dropbox's use case might fit corporate use-case, but on the consumer side you rarely need XXX GB of high-availability storage for entire year - you need it for a short period of time, and it kinda stays unused most of the other time.

kriro• 13 years ago

Seems a bit like setting an anchor for a buyout. I have a feeling a 4 billion offer by Google/MS/Amazon would be accepted very quickly even if it was very little cash/all stock.

Maybe my sense is very wrong but it seems like a decent time to get bought out timing wise.

AhtiK• 13 years ago

IPO

rubberband2• 13 years ago

Google or Microsoft won't buy them. They're hedging their bet that this technology will be a commodity soon (Google Drive and SkyDrive). It doesn't really fit in Amazon's universe. They already told Apple to screw (albeit only at 800M). I think that Drew is a True Believer, where he thinks there is tremendous growth potential in this space. And hell, anything's possible. Who would have thought that such a simple idea, done extremely well, would have such potential.

objclxt2• 13 years ago

It doesn't really fit in Amazon's universe.

Surely Dropbox must be one of AWS's biggest clients? It may not make sense for Amazon to buy them, but the more money Dropbox makes the more money Amazon make (at least whilst Dropbox are still using S3).

will_work4tears• 13 years ago

Not sure if you are aware of it, but Amazon has a share in this space too, Amazon Cloud Drive[1]

[1] http://www.amazon.com/gp/feature.html/ref=cd_def/186-4662895...

driverdan• 13 years ago

Why? Because they can get it at a favorable valuation?

leokun• 13 years ago

Yeah, it's like leaving money on the table I suppose.

shin_lao2• 13 years ago

That's a lot of money! Do they seek it because they can or because they need it?

hemancuso• 13 years ago

I'm curious to know what the plans are to keep driving revenue. Obviously very impressive numbers, but it looks like YoY top line growth looks slow: less than 100% [$116->$200M+]. It leaves one scratching their head as to how Dropbox gets to something like $1B/year under its current business model and later justify something like a 20B public market cap. That would take a something billion users with roughly the same conversion rate. They would need the same base of users as Facebook, but with a huge percentage of them actually paying money, while facing intense competition by players who demonstrate they are willing to lose billions of dollars a year to compete in new markets.

One obvious answer is Dropbox for businesses, but it remains to be seen how well they actually compete in that space. Fined tunes permissions/controls. Integrations. Enterprisey things. They all become more necessary at higher price points. I wonder if Box is in a position to improve their existing sync client faster than Dropbox is to add all those features/controls yet keep their core simplicity.

slouch• 13 years ago

I haven't started paying, yet. Last year, I bought an HTC phone that gave me a bunch of space (20 gigs?) free for two years. I have 27.5gb and I am using 5.75 of it today. My account will either drop back down to 7.5 or I'll start paying to keep it. At my current rate of usage, I'll certainly be using some of the free space by then.

jwr• 13 years ago

Will the use the funds raised to finally optimize their CPU-hungry client, so that it doesn't cut my battery life by 30%?

I'm worried about Dropbox. Worried that they concentrate on adding features (photo syncing?) instead of caring about their loyal paying business customers, who mostly want the software to Just Work and Work Well.

Altaer• 13 years ago

While CPU and battery improvements are always nice, I personally love the added features such as photo syncing. I take a photo on my phone anywhere and it automatically uploads it to my Dropbox in the background so I can view them on my computer when I get home. It's probably one of my favorite features of Dropbox and I hope to see more of this kind of thing in the future. Not to say that other aspects don't need improvement, but I think features like this add a lot of value to the product.

tlogan• 13 years ago

Yes. Dropbox can easily win against SkyDrive, Google Drive, Box, and others by just not screwing up their solution and making it more robust.

Each time I see Dropbox sick page or I have to delete my "~/.dropbox", I think about how focus and doing things right is so important when it comes to storage / data.

krrrh2• 13 years ago

The dropbox client only uses a fraction of the CPU of every other cloud syncing client I've tried, and even most simple menubar utilities. Do you know of one that uses less CPU? I'm genuinely curious.

Nimi• 13 years ago

It didn't need those amounts of resources when Dropbox first started... What changed? Now it's literally causing Windows Explorer to be stuck on folder renames etc, I'm dying to get off the bandwagon the first opportunity I get. This isn't a good way to compete in a crowded market - hope the competition is just as bad.

shin_lao2• 13 years ago

BitTorrent Sync is more lightweight.

carterschonwald• 13 years ago

Yeah. I'm having Dropbox disabled on my laptop by default because of how much CPU it'd randomly need evey single file change.

julesie• 13 years ago

During the Dublin Web Summit (two weeks ago) Drew Heuston stated that Dropbox hadn't touched the previous funds they had raised. I wonder why the need to raise the money at this point?

venomsnake3• 13 years ago

A) Some real expansion B) You generate insane amounts of free marketing and get a check at the end.

uptown• 13 years ago

Recently, more of my software has added Dropbox as an option for synchronizing its data between devices - but I'm hesitant to do so. It seems like Dropbox lacks the necessary access-control granularity. If your FTP client, and a chat program, and a password manager all decide they need read/write access to your dropbox, doesn't that open up attack-vectors across completely unrelated applications and services in ways that previously may have been isolated and sandboxed?

adamio• 13 years ago

You can value it at $8 billion, but that doesn't rule out that someone just overpaid for it. They did get a great deal on advertising

Report: Dropbox seeks new funding, valuing company at $8 billion

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