Dropbox closes the round led by Index Ventures. Several new investors include Goldman Sachs, Benchmark Capital, Greylock Partners, Institutional Venture Partners, RIT Capital Partners, and Valiant Capital Partners. Sequoia Capital and Accel Partners follow on from the previous round. Houston:
Our goal has always been to build a service that hundreds of millions of people would love and trust
Sources say Index is set to lead the round, and say previous indications of as much as $8 billion-$10 billion may have been deliberately high to allow bidders a look at the company’s financials. A firm indication earlier of $5 billion is also now over the mark. One explanation is the general financial market conditions and U.S. government debt problems spooking VCs, while Dropbox is also thought to want access to certain investors and is lowering valuations to draw them in.
Sources say Dropbox is close to raising $200 million-$300 million in a round that would value the company between $5 billion and $10 billion. The sources say it has had multiple offers north of $2 billion and informal discussions around $8 billion.
Livingston interviews Houston, founder of Dropbox. On finding cofounder, Arash Ferdowsi:
That was definitely one of the bigger struggles getting started– having this idea and not having a co-founder. And Paul [Graham] and everybody told me over and over again that this was a necessary condition of joining Y Combinator. I was networking around and letting people know about DropBox and seeing what they though and met Kyle Vogt, a founder of Justin.tv. Kyle had dropped out of school to join Justin.tv and it turned out that he and Arash were both undergrads at MIT, and both from Kansas. The same kind of cabin fever that I had being in Cambridge and watching all my friends move out to Silicon Valley I think Arash was feeling too. So, I put up the screencasts, three or four minute video, about Dropbox and Arash emailed me after that, because Kyle let him know I was looking for a co-founder. We met up at the coffee house at MIT and everything went from there.
The file hosting service joins the summer 2007 intake. Graham tells Houston to find a co-founder within two weeks, and he connects with Arash Ferdowsi just in time to make the cut. (Original application here.) Houston:
It was the way for someone who is not from the Valley get context for what you need to know. Most of the world did not grow up in Silicon Valley … so you’re kind of on the outside.