Dropbox hatches as incubator YC’s first company to offer an IPO

Last week, Dropbox became the first Y Combinator-funded company to hatch an IPO from the famed incubator’s golden ray of VC-funded light, raising $756m. While its initial share price of $21 put Dropbox’s market cap roughly $2m short of its $10m valuation circa 2014, its market cap soared to $12m just 24 hours after its […]


March 26, 2018

Last week, Dropbox became the first Y Combinator-funded company to hatch an IPO from the famed incubator’s golden ray of VC-funded light, raising $756m.

While its initial share price of $21 put Dropbox’s market cap roughly $2m short of its $10m valuation circa 2014, its market cap soared to $12m just 24 hours after its IPO.

Incubator to IPO: A Silicon Valley love story

11 years ago, Drew Houston was an exhausted co-founder working on his first startup when he began hacking together scripts for what would later become Dropbox. 

After being previously rejected by Y Combinator, Houston was admitted to the ‘07 batch — provide he could find a co-founder. So in just a few weeks, Houston found Arash Ferdowsi, and they met in person for only a handful of hours before tying the co-founder knot.

The Y-Factor

Thirteen-year-old Y Combinator is one of Silicon Valley’s most competitive startup incubators, with a lower acceptance rate (1.5%) than Harvard University. 

Dropbox is the incubator’s first company to IPO, but it typically takes close to a decade for large tech companies to go public (Microsoft took 11 years, Oracle 9, and Google 6). 

So, Dropbox may be just the first of many chicks (including Stripe, Airbnb, Instacart, and Zenefits) in Y Combinator’s flock to leave the private nest.

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