Raising a large debt round isn’t uncommon for companies prepping to test the public markets; in fact, it’s often taken as a sign that an offering could be on the horizon. Such a deal provides flexibility to finance an IPO—which can be quite expensive—without further diluting equity stakeholders. Once the offering is complete, the debt can be paid back with the capital raised. That said, founders have been increasingly turning to debt to finance their startups even when an IPO isn't involved, with 2016 bringing a record $14 billion in deal value for rounds that were at least partially debt.
As for Dropbox, the company is said to be meeting with bankers to plan an offering that may come later in 2017. The year looks like it’s shaping up to be a solid time to take the plunge following a notably slow 2016. Fellow enterprise tech unicorn MuleSoft recently completed its IPO, raising $221 million and achieving a $3 billion-plus market cap at the end of its first day trading. Okta, the provider of a cloud identity management platform, is also set to IPO in the coming weeks.
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