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Business Operations Business Models

How Does Dropbox Make Money (Business and Revenue Model)

The Dropbox business model

How Does Dropbox Make Money?
Here’s what you should know:
  • What is Dropbox, and how does Dropbox work?
  • How does Dropbox make money?
  • Subscription Revenue
  • Dropbox’s Subsidiaries, Acquisitions, and Exits
  • Dropbox’s profit and revenue
  • What is the Dropbox business and revenue model?
  • Dropbox’s funding and market cap

How does Dropbox make money if it’s free to use? Here is a full, in depth, breakdown of their main revenue stream and services they offer, as well as the Dropbox business model, their year over year revenue, and how Dropbox works.

What is Dropbox, and how does Dropbox work?

Dropbox is a file hosting service that allows users to send, receive, collab on, and store files in the cloud.

Founded in 2007 by Drew Houston and Arash Ferdowsi, Dropbox began trading on the NASDAQ on March 23, 2018, under the ticker symbol “DBX”. Today, Dropbox serves more than 700 million registered users across 180 countries.

How Dropbox works is: To use Dropbox, users must first create an account.

Once an account is created, they can store up to 2 GB of uploaded and received files for free. But if a user wishes to have additional features that the free version does not have, they can upgrade to one of Dropbox’s five (5) paid subscription options.

Some of Dropbox’s competitors include WeTransfer, Box, Hightail, Google Drive, and other file hosting services.

Dropbox App in Apple App Store | Dropbox Business Model | How Does Dropbox Make Money? | How Does Dropbox Work?
Source: Apple App Store | Dropbox

How does Dropbox make money?

According to page 47 of Dropbox’s 2021 Form 10-K, Dropbox has over 700 million registered users. Of which, 16.79 million are paying users. So how does Dropbox make money off of all these paying users?

Below is a breakdown of how much money Dropbox makes and its revenue model. Including their main revenue stream and how much they charge for their services.

Here is how Dropbox makes money (in 2022):

Dropbox has a revenue model that makes money in just one (1) way – subscription revenue.

#1. Subscription Revenue

While Dropbox offers a freemium version to its users, Dropbox makes all of its money from its users who upgrade to paid subscription accounts; which accounted for all of Dropbox’s $2.16 billion in revenue in 2021.

As noted above, Dropbox has over 700 million registered users. Of which, 16.79 million are paying users; with an Average Revenue Per Paying User (ARPU) of $133.73.

Dropbox offers five (5) tiers for its paid subscription service; Plus, Family, Professional, Standard, and Advanced. All of which offer their own set of perks and added features that the freemium version does not have such as increased storage (2,000+ GB), HelloSign eSignatures, file locking, phone support, and more. You can see the simplified price breakdown below or you can go here to take a look in detail.

Dropbox Subscription Cost:

  • $11.99 to $25 per month (per user) depending on the plan
Dropbox Subscription Cost | Dropbox Business Model | How Does Dropbox Make Money? | How Does Dropbox Work?
Source: Dropbox

Note: Dropbox has 16.79 million paying users.

Dropbox’s Subsidiaries, Acquisitions, and Exits

To date, Dropbox, Inc. has made a total of 27 acquisitions, 3 investments, and 1 lead investment.

Dropbox Acquisitions | Dropbox Business Model | How Does Dropbox Make Money? | How Does Dropbox Work?
Source: Crunchbase | Dropbox

Dropbox’s profit and revenue

In 2021, Dropbox reported $2.16 billion in revenue.

Note: Because Dropbox, Inc. is a publicly traded company, under the Securities Exchange Act of 1934, they must file continuous financial filings with the U.S. Securities and Exchange Commission (SEC). You can find all of Dropbox’s publicly released financial reports, including annual reports, through Dropbox’s investor section on their website.

What is the Dropbox business and revenue model?

Dropbox makes money through a few revenue models that they combine within their company, they are:

  • Freemium (upselling) business model
  • Subscription business model
  • B2B2C (partnerships) business model
  • Mergers & acquisitions (M&A) business model

Dropbox’s funding and market cap

According to Dropbox’s Crunchbase profile, Dropbox has raised $1.7 billion over 11 rounds and has a market cap of $8.29 billion as of April 2022.