With a $10 billion valuation, cloud storage business Dropbox is larger than many public companies. But don’t expect an IPO anytime soon, according to CEO Drew Houston.
“Nothing right now,” said Houston, when asked if the company was working on a plan to go public. Speaking at Bloomberg’s Technology Conference in San Francisco, Houston said that Dropbox is “just enjoying being focused on building and recruiting.”
“We can do that on our own timeline,” he added, saying that the company is in a position where they are “not needing to raise money.”
It’s been two years since Dropbox, which is backed top venture firms including Sequoia and Benchmark, has raised a private fundraising round. But Houston insists that despite negative publicity surrounding the company’s finances, they have enough money in the bank to stick around.
Houston claimed that Dropbox has been cash flow positive, emphasizing that this milestone for a business “means you control your destiny. Instead of being funded by your investors, you’re funded by your customers.”
He did acknowledge that Dropbox has had some struggles, however. When asked about shuttered businesses like Carousel and Mailbox, he said that “you’ve got to cut things like that. All of them had a million users or more but they weren’t really going to move the needle on Dropbox overall.”
Dropbox has also received funding from institutional investors, with companies like Fidelity marking down their investment. Houston cautioned about sky-high valuations, saying he believes that we are now in a “post-unicorn era.” (A unicorn is a company with a valuation exceeding one billion. Dropbox is even considered a “decacorn,” because its valuation is $10 billion).
“In these boom times you get really disconnected from the fundamentals,” he reflected, possibly acknowledging that Houston’s own company mismanaged their financials. And then “when the market corrects, you have a shift, where you go from a focus on growth at all costs.”
“You have to keep an eye on your costs,” he added. “Expenses that start small become big.”
While Dropbox has managed to find over 500 million people to use its services, the industry is saturated with competition. Google, Microsoft and Amazon all have similar offerings and enterprise cloud provider, Box, has already gone public.
A very small fraction of Dropbox’s active users are paying customers, with Houston saying that the company has about 150,000 enterprise customers. He hopes that just means the company has significant room for growth.
“We’ve created our space and we continue to lead it,” said Houston.