Dropbox seeks to expand operations in Israel, possibly acquire startups
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Dropbox seeks to expand operations in Israel, possibly acquire startups

Company opens new offices in Tel Aviv, looking to gain from Israeli expertise in machine learning and security

Quentin Clark, who leads the engineering, product and design functions globally for Dropbox, speaks to reporters at the opening of the firm's new R&D offices at the Azrieli Sarona Tower in Tel Aviv; May 15, 2018 (Shoshanna Solomon/Times of Israel)
Quentin Clark, who leads the engineering, product and design functions globally for Dropbox, speaks to reporters at the opening of the firm's new R&D offices at the Azrieli Sarona Tower in Tel Aviv; May 15, 2018 (Shoshanna Solomon/Times of Israel)

Dropbox, a US cloud storage company that has more than 500 million registered users in more than 180 countries, is planning to double its R&D team in Israel by hiring local engineers and possibly acquiring startups in the field of machine learning and security.

Israel has become “a very attractive place to continue to attract and develop and get impact out of brilliant engineering talent,” said Quentin Clark, who leads engineering, product and design functions for Dropbox and oversees a team of over 1,000 employees globally.

“We are here because of the talent,” he said. “Dropbox can’t afford not to be in Israel because of the nature and depth of the talent that is in this country.”

Dropbox’s Israeli R&D center, which stemmed from its acquisition of Israeli startup CloudOn in 2015, numbers 40 people. Its new Tel Aviv office, which will replace its Herzliya-based premises, is the second largest international Dropbox office, after Ireland, and its team is an “important center” for innovation and engineering talent for the company.

The team has been in charge of developing a set of Dropbox tools for enterprises, which has become one of the firm’s growth engines. Dropbox enterprise clients include companies like Adidas, the BBC and Expedia, with tens of thousands of users each.

The new office space is a “signal of commitment” to the growth of the local team, Clark said at a press conference at the new offices in the Azrieli Sarona Tower, the tallest in Israel, with views over the Mediterranean Sea.

Meir Morgenstern, who leads the local R&D team of Dropbox, left, and Quentin Clark, who leads the engineering, product and design functions globally for Dropbox at the new Tel Aviv offices of the US firm, May 15, 2018 (Israel Hadari)

Growth will come from hiring local engineers but also possibly acquiring startups, Clark said, without disclosing if there were any startups in the pipeline already.

“Dropbox’s long-term mission supports the expansion of our capability,” he said. The company is “definitely” continuing to look for “things we may acquire. We are constantly on the hunt.”

The firm is also looking to expand the activities of the Israeli team from a current focus on enterprise solutions to security and machine learning.

The new R&D center of Dropbox in the Azrieli Sarona Tower in Tel Aviv; May 15, 2018 (Shoshanna Solomon/The Times of Israel)

Israel has a “strong set of talented people around security topics and IT — so that is something we deeply need to take advantage of,” Clark said at the press conference. “We are certainly talking about security being a current area of focus,” he added, at the sidelines of the event.

In addition, Clark and Meir Morgenstern, who leads the local R&D team, will be meeting with local universities to look into machine learning capabilities.

The two will be “spending some time at a couple of universities thinking about additional investments in the machine learning space. There are two countries that are really doing a great job pushing this forward, the US and Israel, and so there may be an opportunity for us to go deeper in that space,” Clark said.

There is a lot of competition in San Francisco for machine learning expertise, he said.

The music room in the new R&D offices of Dropbox in Tel Aviv; May 15, 2018 (Shoshanna Solomon/The Times of Israel)

Typically for tech companies, Dropbox’s new offices include vast open spaces, food corners, a music room and a darkened focus room, where workers can retreat to work in silence. The values of the company, including “We not I” and “Sweat the details” are displayed on one of the walls. There is also an area of unmanned desks, ready for the new recruits.

Founded in 2007 by Drew Houston and Arash Ferdowsi, Dropbox, which is headquartered in San Francisco, held an initial public offering of shares in March 2018, raising a reported $756 million in the biggest tech IPO in over a year. In its first quarterly earnings announcement on May 10, the file sharing company reported first quarter revenue of $316.3 million, up 28 percent from the same period a year earlier. In 2017 the company had revenues of $1.1 billion. The firm invests 35% of its revenue in R&D.

The company is transitioning from being just a cloud location where files are stored to providing businesses with a virtual workspace for teams to work together. “Our mission is to design a more enlightened way of working,” he said. The software enables users using a wide variety of tools to work together by moving their content to Dropbox. “We provide support for every type of file,” he said.

Clark has visited Israel on six previous occasions and has managed engineering teams in Israel while working for Microsoft and SAP in his previous career roles. The media briefing was the first time Clark spoke to the press since Dropbox’s IPO.

The company has 12 global offices and a total of 1,800 employees, half of them working in engineering and product design. The firm has more than 2.5 million registered users in Israel, many of them in Tel Aviv.

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