Dropbox launches its IPO | Biggest tech IPO since Snapchat |
Dropbox, one of the few names in the startup world that have caused a storm in the tech industry has finally managed to launch its public IPO. Before we begin discussing the challenges dropbox faces and whether its a profitable IPO or not, we will see what dropbox actually is.
So dropbox is a file sharing application. For example if you have a file available in your PC, but now you want it on your laptop, you simply upload the file to the cloud and open the application on your laptop and download the file. Voila! You have that file on your laptop now. Dropbox also has apps available on IOS, Windows phone and tables, android, kindle fire. It has application for web, mac, windows and linux. So basically it has its visibility on every major platform available.
But the main question arises how does it generate profits? So, basically it has various plans for individual and enterprises. With free account at 2 GB free space and extending as much as $19.99 for individual with added features. For enterprise/teams it has plans available according to the team size. So, the main revenue generation model depends upon the space requirement, and team size.
Now with its IPO released, it did bring a lot of more money to the table, with dropbox share soaring high up, it does bring a lot of challenges as well.
Initially, it faces a lot of competition from Amazon, Google, Microsoft. With many of the services provided by Dropbox are available for free by Google, people are not willing to spend a lot of money to buy expensive plans from Dropbox. Moreover, according to the stats, there is a 4% conversion rate for Dropbox. It means of every 100 users that sign up to Dropbox, only 4 are converted to paid customers, which is not bad as compared to other sites.
However, Dropbox does live up to its hype and the soaring shares are its evidence. But will it be able to hold up the expectation of investors? or will its share fade away like that of Snapchat.