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  "documentTitle": "Dropbox, Inc. (DBX)",
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  "authorName": "Spruce Point Capital Management",
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  "presentationDate": "2020-02-06 00:00:00",
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  "notes": "Includes a quote from an analyst (Mark Mahaney) that the slide author is preemptively refuting by highlighting the high cost per customer.",
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      "text": "Spruce Point believes that Dropbox will increasingly struggle to grow with scale as it turns to M&A.",
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      "text": "Spruce Point believes that, as Dropbox's organic growth in paying users slows, and as growth into the enterprise vertical becomes increasingly critical, the Company will be forced to turn to M&A for growth - both to increase its user base, and to add new enterprise-centric capabilities. Doing so, however, will come at a steep price, given prevailing valuations in the enterprise SaaS space. In Jan 2019, for example, Dropbox acquired the e-signature company HelloSign for $230M - 11.5x HelloSign's CY18 revenue of $20M, over a turn above industry leader DocuSign's (DOCU) 10.4x EV/Sales multiple at the time. This purchase price also amounted to a cost of $2,875 per customer for HelloSign's 80,000 reported. Spruce Point believes that Dropbox will increasingly struggle to grow with scale as it turns to M&A.",
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      "text": "This deal makes sense from a strategic standpoint for two reasons: 1) HelloSign seems like a positive complementary business product to sell; and, 2) The acquisition provides a potential opportunity to further expand enterprise sales and win more share of the customer wallet,\" Mark Mahaney, an analyst at RBC Capital Markets, wrote in a note to investors on Monday.",
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      "text": "\"This deal makes sense from a strategic standpoint for two reasons: 1) HelloSign seems like a positive complementary business product to sell; and, 2) The acquisition provides a potential opportunity to further expand enterprise sales and win more share of the customer wallet,\" Mark Mahaney, an analyst at RBC Capital Markets, wrote in a note to investors on Monday. — Mark Mahaney",
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      "text": "Source: Bloomberg, Jan 28, 2019",
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      "text": "Customer Cost Analysis: Purchase Price $230M, Customers 80k, Price per Customer $2,875, HelloSign ARPU ~$250",
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      "text": "Company: DocuSign (DOCU), EV/Sales: 10.4x; Company: HelloSign ($20m of revenue), EV/Sales: 11.5x",
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      "text": "Shift To M&A-Driven Growth Will Be Costly",
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