Dropbox Raises About $250 Million at $10 Billion Valuation
BlackRock Is Leading the Deal Alongside Previous Backers
By Douglas Macmillan
Wall Street Journal
Updated Jan. 17, 2014 6:47 p.m. ET
Dropbox Inc. has closed on about $250 million in a funding round that values the online-storage provider at close to $10 billion, according to two people familiar with the deal.
A BlackRock Inc. BLK in Your Value Your Change Short position investment fund is leading the deal, which is set to include previous backers, said one of these people, who declined to provide more detail.
A spokeswoman for Dropbox didn't respond to requests for comment.
At $10 billion, Dropbox is now one of the most highly valued companies backed by venture capitalists.
The company's valuation has more than doubled since late 2011, when investors valued the San Francisco-based company at $4 billion. The company also got a higher price than expected when it approached investors as recently as November.
Dropbox raised $250 million in its 2011 financing from Goldman Sachs GS in Your Value Your Change Short position and venture-capital firms including Sequoia Capital, Index Ventures and Accel Partners.
The funding will help accelerate Chief Executive Drew Houston's push into business software.
With more than four million businesses using Dropbox, the company has begun selling security and other premium features to companies who want to manage how their employees store files with the service.
The Wall Street Journal previously reported that Dropbox had expected sales of more than $200 million in 2013.
The company had $116 million in sales in 2012, according to people familiar with the company's financials, more than doubling its $46 million in revenue in 2011.
The year before, it nearly quadrupled sales from $12 million.
Dropbox's latest funds may also help it step up competition with online storage rival Box Inc., which raised $100 million last month at a $2 billion valuation.
The elite club of companies with multibillion-dollar valuations is growing. Last year, Palantir Technologies was valued at $9 billion; Spotify was worth $4 billion; and Uber Technologies was valued at $3.76 billion.
BlackRock, the world's largest money manager with $4.32 trillion in assets, has stepped up investments in technology startups in recent months, including in advertising-technology maker Turn Inc. and lending marketplace Prosper Funding LLC.
Large institutional investors have put money into the hottest Silicon Valley companies in anticipation of their initial public offerings.
Goldman Sachs led an investment in Facebook Inc. FB in Your Value Your Change Short position in 2011, a year before the social network's IPO. Fidelity Investments last year backed Pinterest Inc., the online scrapbooking service with a value of $3.8 billion.
Mr. Houston played down Dropbox's IPO plans during an interview at the Dublin Web Summit last fall.
"I think it's something I'm sure we'll do eventually, but for now, it's really nice to just really focus on recruiting, really building a great foundation, really building the next generation of great products that we're excited about," he said.
At least one important piece to a potential IPO is still missing: Dropbox has no chief financial officer.
—David Benoit contributed to this article.
Write to Douglas MacMillan at douglas.macmillan@wsj.com
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