Dropbox looks to raise $250 million at $8 billion valuation

Fast-growing file-sharing and storage startup Dropbox Inc is trying to raise $250 million in additional funding in coming weeks, which would value the six-year-old company at more than $8 billion, Bloomberg Businessweek reported on Monday.

The company may become the latest hot Silicon Valley startup to take advantage of flush investors and stratospheric valuations for fledgling tech companies. Loss-making Twitter Inc is now valued north of $20 billion after its debut; Pinterest, which only recently began to clarify its business model, last month won a round of financing that valued the nascent website at $3.8 billion.

But Dropbox has a problem: Some very big competitors want its business. And they are willing to offer absolutely anyone even more free cloud storage space than Dropbox to lure them away. For example, while Dropbox only offers 2 gigabytes of free storage, which isn’t enough to store a single downloaded movie, much less the photo library of a life-logging phone photographer, Google offers users 15 gigabytes of free storage, or 100 gigabytes to those who buy a Chromebook.

Dropbox, started in 2007 by a couple of MIT students, made its name as the simplest way for regular consumers to synchronize all their files between a desktop and a laptop. Every file in the Dropbox folder simply appeared on both machines. But over the past few years, Dropbox has also become a preferred way to handle moving files on and off phones and tablets, where syncing was an even more unpleasant and unreliable chore. 

Last year Dropbox cleverly added a feature to its mobile apps to automatically upload every photo taken on a user’s smartphone to Dropbox servers for syncing and safekeeping (with the user’s permission). Users could win additional free space for photos by convincing friends to sign up. By making uploading and syncing automatic – and invisible to the user – Dropbox helped fill its servers faster, and convinced more users to pay for additional space.

Valuing Dropbox at $8 billion seems completely reasonable in light of other recent Internet IPOs. Twitter had revenue of $317 million – and no profits in sight -- the year before it went public at a value of over $18 billion. And its active user base of 185 million at the end of 2012 was smaller than Dropbox’s is now.

The cloud storage market, like all cloud computing sectors, should continue to grow for the foreseeable future. But until one of these companies goes public, it won’t be clear how much the market is actually worth, as private company valuations are very different from the stock market.

Twitter Attracting Huge Demand, all set to make the most anticipated stock market debut!

Credit : Reuters

The New York Stock Exchange ran a test of Twitter’s (NYSE:TWTR) eagerly awaited market debut on Saturday with an IPO simulation.

As of now, Twitter is planning to offer 70 million shares at $17 to $20 each, according to regulatory filings. Shares will likely price Wednesday with public trading starting the following day. CEO Dick Costolo is touring the country, making stops in major U.S. cities to ignite interest in the stock. His road show is largely ceremonial given the outsized interest in what will be the hottest IPO since Facebook.

The company will trade under the "TWTR" symbol on the New York Stock Exchange, breaking from the Nasdaq market used by a large number of tech companies.

Critics believe that Twitter is playing it too safe. Current valuations imply a multiple of 9.5 times 2014 sales compared to Facebook’s current 12.9 multiple. That puts Twitter at a 27 discount to its biggest rival. It’s also priced at a 29 percent discount to LinkedIn (NASDAQ: LNKD) that trades at 13.4 times 2014 earnings.

here is considerable excitement about the IPO because Twitter is "a unique product that no one can replicate," said Michael Pachter, head of equity research at Wedbush Securities.

Pachter and his colleagues said in a research report that they expect high demand.

"We believe that the market is likely to generate appetite for more than $1 billion in stock," they said.

That is a relatively small chunk of Twitter's capital, and implies a market value between USD 9.3 billion and USD 11.1 billion -- a conservative figure compared with some of the private market trades in Twitter so far.

"The simple rules of supply and demand suggest that by limiting the supply of shares offered to the public in its IPO, Twitter will be unable to satisfy demand."

And Twitter appears to have learned a lesson from Facebook's debacle in May 2012, marked by trading glitches, accusations about secret information and a plunge in the share value for months after the IPO.

"The Facebook situation last year was a perfect storm of an overheated private market, a fully priced offering, a massive amount of shares brought to market, all compounded by an historical technical glitch," said Lou Kerner, founder of the Social Internet Fund.

Smartphones: Smartly making us dumb?

Today, if you tell a child that there was a time when there were no phones, he would think of you as an idiot.  There was a time when there were round shaped dials on phones in our houses and we literally used to fight over the issue that who is going to pick up the phone next time it rings. Journey from Telephone to phone and now smartphone has been a long one though, and in this post - computer generation children are born having an expert like knowledge of e-gadgets. It is true that Smartphones have become not only part of our daily lives but also an extension of our selves.

Now a days the term phone is used with a prefix “smart”, smartphones - phones that are smart enough to do anything that you wish for. With smartphones you are always connected to the world, thanks to Facebook, Whatsapp, Twitter is just a few touches away; don’t worry even if you are lost in the middle of a desert, just switch on your smartphone’s GPS and there you go, you will get turn by turn directions to your home. It doesn’t matter if you are aware of current rate of Dollar in INR, who is the current PM of Australia, stock price of Apple Inc., how far is the moon from earth – Google is there to help you; your one stop search for everything.  You are out on holidays and your “Incompetent Boss” called and asked you to make a presentation and send him in couple of hours and unfortunately you didn’t bring your Laptop with you (which moron carries a laptop during holidays!), In this case your smartphone is your life saver in which you can prepare and entire presentation using apps like MS Office, iWork etc. Gone are the days when you used to carry Digicams and SLRs separately with you to take pictures, but with smartphones you can easily take SLR like pictures and don’t have to be a pro to know the exposure settings, lenses required…you just have to make click at the right time and instantly share it in social networking sites. You can check emails even while struck in traffic.

A few days back Apple launched its flagship device – iPhone 5S, which has a fingerprint scanner and desktop class 64 bit architecture in its new A7 processor. The first thing came into my mind was - “dude is it a phone or a Laptop”. Buts it’s true that smartphones are giving some tough time to Laptops.

But is it a boon or bane? Smartphone are used so frequently that they have made us so helplessly dependent that we will be lost if one fine morning we wake up to find our Smartphone got vanished. There was once a time when people used to meet in clubs, parks or in pubs or in gatherings for social interaction and sharing of thoughts and ideas with friends and families. Now they do everything with just a single touch. People are happy to interact in a social space (online) that seems more relish, more actual. People who are unable to reveal their thoughts in real world find it very easy to communicate with people in a virtual world, and gradually they are constructing their virtual counterpart which is entirely opposite from each other. In most of the cases the virtual dominates the real; and smartphone having all-in-one features is acting as a catalyst helping in our continued existence in virtual world. Therefore, a world without Smartphone will push us towards an existential crisis.

Being a guy from this generation I can easily say that we can’t imagine a single day without our smartphones.

We are in an age where knowing about weather forecast or getting updated world news do not depend on arrival of newspapers or telecasting of news shows.  We wake up with checking the day’s schedule on the touch screen of our Smartphone and start working accordingly. Imagining a world without Smartphone is more horrifying than a ghostly nightmare. So, what should we call ourselves? May be Siri could answer!!