J. Michael Arrington (born March 13, 1970 in Huntington Beach, California) is a serial entrepreneur and the founder of TechCrunch, a blog covering startups and technology news. Arrington attended Claremont McKenna College (BA Economics, 1992) and Stanford Law School (JD, 1995), and practiced as a corporate and securities lawyer at two law firms: O’Melveny & Myers and Wilson Sonsini Goodrich... ? Learn More
Dropbox is finally moving to close that massive valuation venture round we’ve been talking about all summer. According to multiple sources, Index Ventures will lead the round, which values Dropbox at around $4 billion.
At some point I hope that the entire story comes out about this round. Nearly everyone in Silicon Valley has taken a look. There was early interest at valuations of $8 billion or more, although one source says that it may have been firms who threw out huge numbers just to get a look at the company’s financials. As of a couple of weeks ago I had “firm” information that the round would close at $5 billion or more.
As far as I can tell, that information was accurate at the time. But the valuation ended up lower. Why?
I’m hearing two reasons. The first is the U.S. government debt uncertainty and general financial market uncertainty, which has spooked VCs. The other reason, say sources, is that Dropbox really wanted the involvement of certain investors, and they needed to drop the price to get them on board.
There’s a relatively large investor syndicate, say our sources, with involvement from a variety of firms beyond Index.
We’ve also spent a lot of time trying to track down Dropbox’s revenue numbers, a closely guarded secret at the company. Speculation was that they’d hit $100 million in revenue this year. Our best guess based on discussions with sources is that revenue will be more like $30 million in 2011. But this is still largely a guess.
More as this develops. Prior to this round, Dropbox had raised just $7.2 million.
Dropbox was founded in 2007 by Drew Houston and Arash Ferdowsi. Frustrated by working from multiple computers, Drew was inspired to create a service that would let people bring...
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INDEX VENTURES
Index Ventures is a leading venture capital firm specializing in investments in information technology and life sciences companies. The firm invests in seed, early and growth stage start-ups across...
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