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The clock is ticking for Dropbox: Can it grow revenues fast enough for its $10 billion valuation?

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Because it has done so well till now, can Dropbox build a sense of urgency culturally?

The company's annualized revenue run rate was over $400 million as of December, according to a person familiar with the company's finances, as well as a report in The Information. That's only about 1/25th its most recent reported valuation.

Even a growth rate of 50% a year would mean it is now at about a $500 million annualized run rate, or about 1/20th its latest reported valuation. (Dropbox declined to comment on these figures and on most other aspects of this story.)

That's probably not enough to go public at a $10 billion valuation. Box, which is Dropbox's closest competitor in the enterprise, set its IPO value at $1.67 billion, a little less than eight times its 2014 revenue of $216 million. The highest multiple for any public internet-software company is Xero's, at 15 times revenue.

Dropbox for Business is Dropbox's best chance to grow its paid user base. With DfB, businesses pay $15 per user per month, or $150 per user per year for unlimited storage and extra features such as better security and admin controls. Dropbox says DfB has already signed up more than 100,000 paying businesses, including company-wide deployments at Spotify, MIT, and National Geographic.

Dropbox COO Dennis Woodside has called it "the ultra-high growth of our business going forward.”

Can DfB get the company ready to go public as a $10 billion company? We spoke to several insiders who harbored doubts about the product and the company's pace of innovation as a whole — as well as a couple who think that although the entire market is in a tough place, Dropbox is in as good a position as anyone to win it.

Growing pains and slowing innovationDropbox operates in a brutally competitive business. Cloud storage in general is headed toward a so-called race to zero, where companies keep cutting their prices while increasing storage limits. Big companies with other strong businesses such as Microsoft, Amazon, and Google are not afraid of losing money up front to gain market share. 

It was only a little over a year ago that Dropbox finally made DfB a priority, even though it was clear before then that it needed that extra push from business customers, according to a former employee. 

In the last quarter of 2013, Dropbox hired almost 200 new people, with a heavy focus on DfB. Almost all of the company's resources in its overseas offices, which grew to 10 from three in the past 12 months, are purely allocated to DfB. It has also added a more structured sales process, which made sales quotas higher and the pressure heavier. "People are very focused on hitting their quotas now," this former employee said.

As a result, DfB has signed up some large enterprise customers, including Under Armour, News Corp, Hyatt, and Yahoo, and some of them have bought thousands of seats. Several people close to the company insist that DfB growth is "on plan" and that they're happy with its progress.

But the former employee also said a larger, company-wide problem held Dropbox back for a while: not enough urgency.

Not enough urgency and screwing over their best custoemers.  

So what happens to Dropbox if they can't go public? Do they get bought by someone?

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