San Francisco based cloud service providing company Dropbox Inc. has secured a massive $600 million credit facility from six banks including JPMorgan Chase & Co, says a report from Bloomberg. The report also states that the company is planing to become a public entity before the end of this year, and this could be its last fund-raising stage before the event.
The company and the banks are tied with the bond of commitments, and the funding of $600 million will provide Dropbox with a much needed financial stability and flexibility as it makes it way towards the IPO.
The reports say that the startup was constantly in touch with banks in order to discuss its plans, and though the dates haven’t been exactly confirmed, it is being predicted that Dropbox will make a public debut by the end of this year.
Dropbox said that they are in no hurry of going public and they will turn profitable very soon. Last summer, company CEO Drew Houston revealed that Dropbox is cash-flow positive, with the company generating a yearly revenue of $1 billion. The reports also say that they may become profitable even quicker if they resolve to aggressive expansion or starts making acquisitions.
In addition to JPMorgan, other banks participating in the event, as per the report, are Bank of America Corp., Deutsche Bank AG, Goldman Sachs Group Inc., Macquarie Group Ltd. and Royal Bank of Canada.
Since its launch in 2007, Dropbox has always maintained a loyal user base seeking for new and secure place to keep their photos and documents which could be accessed from any place via smartphone or computer. Taking the advantage of this fan base the company gathered a valuation of $10 billion in early 2014, making it one of Silicon Valley’s most valuable unicorn startups. Just a few months later, it managed $500 million credit facility led by JPMorgan.
A rival cloud storage company Box Inc. went public in 2015, and after making an impressive first day mark the company lost 40 percent of its market value by the end of that year.
Lately, Dropbox is more inclined towards providing its cloud services to big companies for the sake of boosting its revenue. It is also building its own data centers in order to lessen its reliance of Amazon.com Inc.’s cloud storage.
Dropbox has a convincing growth rate and its cash generating capability is better than any of its Silicon Valley counterparts which proves it a better and safer investing option in comparison to Snap, which recently debuted on the Wall Street.
