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Exclusive: In a bid for overseas growth, Dropbox partners with SoftBank in Japan

April 7, 2015, 2:00 AM UTC
Dropbox CEO Houston speaks at TechCrunch Distrupt 2013 in San Francisco
Drew Houston, CEO and Co-Founder of Dropbox, speaks on stage during a fireside chat session at TechCrunch Disrupt SF 2013 in San Francisco, California September 9, 2013. REUTERS/Stephen Lam (UNITED STATES - Tags: BUSINESS SCIENCE TECHNOLOGY HEADSHOT) - RTX13ET1
Photograph by Stephen Lam — Reuters

Online file sharing company Dropbox is ramping up its international expansion plans in a deal with Japanese telecommunications giant SoftBank.

Under the partnership, SoftBank’s commerce and service arm will be the primary reseller and distributor of Dropbox’s business products in Japan.

The deal, announced late Monday, could bring in over one million new Dropbox for Business licenses over the next few years, says Marc Leibowitz, vice president of partnerships and platform at Dropbox. “This is going to turbocharge our growth in Japan,” he says.

For Dropbox, distribution deals have been the vehicle by which the company has been able to grow its consumer base internationally. In the past, Dropbox has inked deals with Samsung, Vodafone, and SoftBank’s mobile carrier arm to load its mobile apps onto their new phones.

Dropbox has also used resellers to supplement the work of its internal sales team for business customers. For example, in 2013, Dropbox announced such an agreement with Dell.

Global expansion has been a key part of Dropbox’s overall strategy over the past year as it tries to take market share in a crowded field that also includes Box, Microsoft and Google. In January, Dropbox opened London and Israel offices after adding two others in Sydney and Japan in 2014.

International growth and adding corporate customers will be key for Dropbox if and when it files for an initial public offering. The company is among a small group of hot Internet upstarts that already command multi-billion dollar valuations as privately owned businesses and potentially even more after going public.

Dropbox, based in San Francisco, wouldn’t say how many business customers it currently has in Japan. But it did say that sales to corporations have doubled in the past year. When its free service is included, Dropbox has 10 million Japanese users. Dropbox says that over 70% of its users are now outside the U.S.

Softbank has considerable experience as a technology reseller to Japanese businesses. It is already among the larger resellers for Google Apps, the search giant’s web-based services for word processing, spreadsheets and presentations. From a strategic point of view, getting a Japanese partner made sense because resellers are the primary channel through which businesses buy and adopt new software and technology, Leibowitz said. He declined to disclose financial terms of the deal with SoftBank.

In its European expansion, Leibowitz said that Dropbox will rely less on resellers to reach business customers and instead follow more of its U.S. model of using its internal sales team. Currently, Dropbox has over 100,000 business subscribers that pay $150 per user per year.