Dropbox sees huge potential in Europe
Fast-growing Dropbox, which has its HQ in Dublin and Bono and Edge as investors, has become a tech company to watch
When Dropbox’s Johann Butting, European head of operations and online sales for the San Francisco company, announced last month that Dropbox would start hiring “aggressively” for its fledgling European headquarters in Dublin, it was a clear sign that Dropbox sees plenty of market potential over here.
Of the 175 million users claimed by the company, Butting says a third are in Europe. “Obviously there are more potential international users than 175 million users, so there’s a huge opportunity for growth in Europe – and everywhere else.”
Many investors and analysts apparently feel the same, as fast-growing Dropbox – which has both Bono and The Edge as second-round investors – has become one of the California tech companies to watch, with a $4 billion valuation at the time of its last investor round.
Ever since its founders indicated at its early summer DBX developers conference that they were moving to turn the little app into a full-blown platform, ideally targeting the paying business market along the way, Dropbox has been claiming plenty of column inches, including a big spread in Wired magazine.
The aim is to make Dropbox – which enables users to synchronise content across devices, store and selectively share it – the “spiritual successor to the hard drive”, Drew Houston, DropBox’s chief executive told Wired. Whether it is a file, a picture, a video, a slide presentation, data sent to an app, Dropbox will take it, store it and make it available across all a person’s computers and devices, or to other people if given access to a user’s Dropbox folder, and potentially, with permissions, to other services.
Houston co-founded the company in 2007 with fellow Massachusetts Institute of Technology student Arash Ferdowsi. It was nurtured in the famed Y-Combinator start-up accelerator in Silicon Valley and has sucked in over $250 million in funding to date. In the past 18 months, it has spent $100 million on acquisitions, to beef up abilities in areas such as handling email.
“If you take into account what you heard at DBX, then something that was obvious became even more obvious,” Butting says. “A highly scalable product became even more scalable.” That’s why DropBox came to Dublin, he adds, “to have access to talent to support and build a scalable product”.
He might have added to build a scalable company, as well. It is still a surprisingly small company for its valuation and number of users – about 300 people, of whom about half are engineers.
But its intention, stated at DBX, to open up Dropbox to outside developers so that they can enable apps and services to connect easily to Dropbox, is, as Butting acknowledges, a fast way to build capabilities and expand users – if the strategy works.
Dropbox cannot exist on its free service alone, though, not even one with the coolness-coupled-to-usefulness factor to have made the company an early, but unsuccessful, target for Apple’s Steve Jobs.
Dropbox won’t say how many are paying for its business-level service, which it says has two million users, and (if paid for) starts at $795 a year for five users. Nor will it release user figures for its Pro service for individuals, which gives added storage and other features, starting at $99 a year.
But pushing people to sync ever more devices and content to Dropbox’s cloud storage is likely to push ever more people towards the point where they exceed their free space and need to buy more.