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Summary:

Updated with new information from Dropbox: You don’t go into file backup and syncing for the fame and glory, but that’s what it seems to be yielding for 2-year-old Dropbox. Simply put, people — including my GigaOM coworkers and I — love Dropbox because it works. […]

Updated with new information from Dropbox: You don’t go into file backup and syncing for the fame and glory, but that’s what it seems to be yielding for 2-year-old Dropbox. Simply put, people — including my GigaOM coworkers and I — love Dropbox because it works. “We do have a rabid following,” Dropbox CEO Drew Houston admitted in a conversation today.

Over the summer Dropbox raised a $7.25 million Series A round from Sequoia Capital and Accel Partners, adding to $1.5 million in seed money it brought in from Sequoia Capital and Y Combinator in 2007. Accel’s Sameer Gandhi, who had previously led Sequoia’s investment has since become a partner at Accel, led the round. We found out about the Series A via an SEC filing; Houston confirmed the funding had closed but said that the filing was not the final amount. Houston said the company had not yet disclosed its A round because up until last month it was in the process of obtaining the URL dropbox.com from a domain squatter.

He later contacted us (after this article was posted) to share more details. Dropbox had raised $1.2 million in debt in 2007 from Sequoia Capital and that along with interest (on that amount) converted to equity as part of the Series A investment, which included a fresh slug of $6 million. That brings company’s total investment raised to date to $7.25 million. Houston claimed that the round was closed in October 2008, though the documents were filed with the SEC in July 2009. The round was led by Sequoia Capital with participation from Accel Partners.

Dropbox now has 3 million registered users, up from 2 million in September and 1 million in April. Nearly 1.5 million of them were active in the last month, including 300,000 using the company’s new iPhone app, according to Houston. And many of those folks identify themselves as Dropbox lovers, with more than 35,000 signing up to be Twitter followers and 23,000 as Facebook fans. A 2-week-old feature that allows the community to vote on new features has garnered nearly 10,000 votes for the top choice: selectively syncing certain files or folders rather than a whole account.

Alongside other lightweight web apps like Gmail infiltrating the enterprise, Dropbox customers (an undisclosed portion pay $10-$20 per month for additional storage) are now using the simple tool to do their jobs. In some ways, the migration is flowing in the opposite direction — a traditionally enterprise concept is now available to everybody. And Dropbox, as could be expected, says it will offer tools for corporate collaboration in a more formal fashion early next year.

San Francisco-based Dropbox has just 20 employees. The service currently stores nearly 1.3 million gigabytes of data.

  1. [...] today GigaOm reported that Dropbox raised a new $7.25 million funding round over the summer (a number they [...]

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  2. Man, this is one of those “why didn’t I think of that?!” ideas.

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  3. 1.3 million gb of data. Why not just say 1.3 PETA byte, sounds too small :-)

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  4. [...] today GigaOm reported that Dropbox raised a new $7.25 million funding round over the summer (a number they [...]

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  5. [...] Raised $6 Million Sequoia-Led Series A In October 2008 Earlier today GigaOm reported that Dropbox raised a new $7.25 million funding round over the summer (a number they [...]

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  6. I’m a dropbox user and fan of the service as well. Finally somebody is doing this technology right.

    Btw, minor thing– the title confused me a bit at first. I thought by “Crosses 3M Users” you meant “pissed them off.” I eagerly awaited the analysis of how dropbox getting a big funding round managed to irritate all of their users :)

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  7. Didn’t a myriad of such companies startup in the 90s and promptly tank thereafter? What’s different about this one?

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  8. Uhhhh, no, they did not obtain the domain from a domain squatter. They leveraged the courts to commit a reverse domain name hijacking effectively stealing a domain from a third party that registered it in 1995. To those keeping track, that is more than a decade before the service was conceived on a fateful bus trip. So they create a company– knowing the domain is taken–then steal it from the owner using the courts. Liz, nice research. “Trusted Insights…” SCOFF!

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  9. @Vital: Yup, that title is rather confusing.

    Same with the writer’s bio: “Neither of them are not shareholders in the company.” That’s so wrong on several levels!

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  10. dropbox is a good tool for backup and syncying files, But for collaboration and & sharing http://www.binfire.com has the right tools!

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  11. @Vishal, I second your remark on the ambiguous title.

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    1. Neils

      Crosses 3M users is pretty simple and obvious. There is nothing ambiguous about it. I disagree with you on this one.

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  12. I had a 1 yr subscription to MobileMe (mac) and it never worked as well as the free service from Dropbox. I use Dropbox to sync all our family computers now and it works great. If anyone is interested in getting some free bonus storage feel free to use my dropbox referral link below…
    https://www.dropbox.com/referrals/NTIwNTA3NjI5

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  13. congrats drew & team from another passionate Dropbox fan & regular user!

    Dropbox Rocks :)

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  14. Dropbox is great I use it regularly, the only thing that might make me switch is Ubuntu One, but I understand this is not a solution for everyone.

    Vishal – you are totally right I was trying to figure out what they did to piss off the company 3M!

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  15. As a university student, I’ve found that Dropbox has been pretty invaluable to me!

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  16. [...] 今日、GigaOmはDropboxがこの夏、$7.25M(725万ドル)の資金を調達したと報じた。GigaOmはこの数字をDropboxのSEC(証券取引委員会)への報告書から得たものだとしているが、同社CEOのDrew Houstonは否定した。われわれがHoustonに話を聞いてみたところ、「金額も違ってるし、時期も1年ずれている」とのこと。現実にはDropboxがシリーズAの資金調達に成功したのは昨年の10月で、幹事はSequoia(Accelではない。ただしAccelもAmidzadPartnersと共にラウンドには参加していた)、額は$6M(600万ドル)だったという。 [...]

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    1. Sorry that the headline confused folks. Maybe it’s a dialect thing? I’ll remember to be careful with the word “cross” in the future.

      @JohnB I corrected the typo you saw in my bio. We’d just added that as I moved over to the GigaOM web beat and will be covering Facebook. It’s meant to convey that I don’t have a financial interest in the company.

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  17. [...] “Really Cool” Ads and Commercial Accounts Coming Soon See All Articles » Dropbox Raises $7.25M, Crosses [...]

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  18. Great news, this means that dropbox will get better.
    Btw your free 2GB of online storage onDropbox + 250 MB bonus from: http://bit.ly/6Rvg8o
    Also you can use also wuala, a free online storage tool. Check it out: http://bit.ly/7TOFYE

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  19. [...] Dropbox has raised $7.2 million in Series A investment which includes $1.2 million debt from Sequoia Capital and interest now converted to equity as part of the investment. Sequoia Capital led the round with participation from Accel Partners. (Read more at Gigaom) [...]

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  20. [...] first reported the funding based on a regulatory filing, but much of the information in that initial report was wrong, Dropbox [...]

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  21. Why is a marked-up version of the copy (with strike-throughs) appearing on the site?

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  22. [...] Dropbox is supported on Windows, Mac OS X, and Linux, and now even has mobile applications, as well. Further, I have a special place in my heart for this service because I started using it almost 2 years ago, and it has acted as a file sharing and project management tool for my own startup’s internal operations at Parse.ly. I was therefore more than ecstatic to discover that this excellent tool and its smart founders had also made it through all of the hurdles necessary to get an early-stage company the financing it needs; they’ve raised over $7 million in financing and have over 3 million users. [...]

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  23. [...] as SVP Sales and Marketing.  The user milestone is remarkable considering that the company touted 3 million users in November 2009 and 2 million in September [...]

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  24. [...] dropped search marketing as a strategy, Dropbox has actually grown incredibly fast. At some point, the company realized that user referrals were its biggest source of growth, so now [...]

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