Dropbox, one of the most watched companies in Silicon Valley, officially announced on Monday that it raised an astounding $250 million in a Series B round led by Index Ventures, reportedly valuing the virtual file cabinet company at a whopping $4 billion. This massive round stands in contrast to the first bit of money raised — about $7 million – from early investors including Sequoia Partners, Accel Partners, and Hadi and Ali Partovi.*
Founded in 2007, Dropbox is virtual storage that allows consumers to access documents, photos and videos from several devices. So if you happen to snap a picture on your Android operated phone and store it to your Dropbox, you can pull that same photo on your iPad or laptop, for example. It eliminates the need for thumb drives or even email as long as you download a storage box on each device.
The company has about 45 million users. Dropbox provides a certain amount of storage for free before charging people for extra capacity. People can also get more storage by referring friends. Dropbox won’t reveal revenue or profit figures.
Drew Houston, the co-founder and CEO of Dropbox, spoke with Reuters yesterday about the pile of cash the company just landed and what they plan to do with it.
It’s a huge jump in funding from $7 million to $250 million. Why?
DH: It was completely opportunistic. We are profitable. We actually don’t need the money. The way we think about is a couple of things. Last year we had millions of users, this year we have tens of millions of users, soon we will have hundreds of millions of users. We are scaling to this other level. For example, for many people it’s great you can take pictures and HD video with your phone but how many people have seen that on their TV? Or if you leave that phone in a cab then it takes baby pictures with it. And so people love all the things that technology can do but it brings with it other problems and we think we can contribute a lot in solving them.