Dropbox Said to Discuss Possible 2017 IPO in Talks With Advisers

Dropbox Inc., the popular file-storage company, has met with advisers to discuss the possibility of an initial public offering as soon as 2017, according to people familiar with the matter.

Management wanted to talk about the feasibility of a listing and get a sense of the valuation the company could fetch from public market investors, the people said. The conversations were exploratory and no final decision has been made on a potential IPO, said the people, who asked not to be identified because the matter is private.

The meetings, which the people said Dropbox sought out, signal a shift in thinking by the closely held company and its Chief Executive Officer Drew Houston, who said last year it had no plans to go public anytime soon.

A spokeswoman for Dropbox declined to comment.

Dropbox, based in San Francisco, has faced questions over whether it’s worth the $10 billion valuation it was awarded in a 2014 funding round. Since then, a number of investors who also invest in both public and private stocks have written down the value of their holdings in the company.

Though not yet profitable, the company is free-cash-flow positive, Houston said at the Bloomberg Technology Conference in June. Getting to that point took revenue growth and greater discipline on costs, Todd Jackson, the company’s vice president of product and design, said in June.

Some 200,000 business teams pay for Dropbox products, Houston said at Fortune’s Brainstorm conference last month. The company recently added sports retailer Adidas AG to its list of enterprise customers. It has 500 million registered users, according to its website.

After making its name in file-syncing and sharing, Dropbox has been trying to expand into the larger market of cloud-based collaboration. The company has recently added tools for scanning documents with a smartphone camera and for creating new Microsoft Office documents with the click of a button.