Stars follow $270m Facebook stake with backing for internet storage service
Lisa O’Carroll, The Guardian
His investment firm is looking forward to potential profits of about $1bn (£620m) from Facebook. Now U2 front man Bono appears to have developed a thirst for web technology, giving his personal backing to internet storage service Dropbox alongside bandmate the Edge.
The U2 pair were announced as individual investors by Dropbox in a picture posted on Twitter showing the musicians posing with founders Drew Houston and Arash Ferdowsi.
The service, which is still in its formative stages, has more than 50m users and was described as “tech’s hottest startup” by Forbes in a cover story last November. The company did not specify how much the musicians invested.
“Dropbox is excited to welcome Bono & The Edge as investors. Thanks for the support and look forward to great things!” the company tweeted.
According to Forbes, revenue is expected to hit $240m in 2011 even though 96% of users only use its free service.
Dropbox is a web service that allows users to store documents, photos and video in the cloud with the first 2Gb free. Heavy users then pay $10 a month for up to $50Gb and $20 a month for 100Gb in storage.
Houston told Forbes that even if he didn’t sign up a single new customer in 2012 his sales would double because of the growth trajectory in storage usage.
The investment by Bono is the latest in a string of tech investments for the U2 frontman.
As cofounder of Elevation Partners he has invested in Palm, Yelp and Facebook, with investment in the latter two companies inspiring the company to start building a new $1bn investment fund.
The first fund, launched in 2004, was worth $1.9bn with $270m of that ploughed into Facebook in three instalments between 2009 and 2010.
The imminent IPO could now value the company at about $100bn, which could net the firm about $1bn, according to sources.
Elevation also committed $100m in an investment in consumer review website Yelp in 2010 on the basis of a valuation of $500m, the source said. Yelp completed its stock market flotation earlier this month and currently has a market capitalisation of $1.4bn.
“They did their IPO in March and based on how it is trading today, they have tripled their investment,” said a source.
According to TechCrunch, Bono and the Edge got to know the Dropbox founders after they developed a music app on Facebook, iLike. They approached U2 to help them with the launch of a new feature which would help them promote videos to fans and ended up with an interview and a previously unreleased track.