The U2 stars Bono and the Edge are gambling on their biggest hit yet after investing millions of dollars in an internet storage company which is tipped to become the next Apple.
The Irish singer and his guitarist colleague were announced as individual investors in Dropbox, a file-sharing service that lets users retrieve their photos, videos and documents from any web-connected device.
One of Silicon Valley’s hottest properties, Dropbox has attracted 50 million users by word of mouth and is already valued at $4 billion. The company plans to challenge Apple and Google in the rapidly expanding "cloud" online storage business.
Dropbox co-founder Drew Houston, who plays guitar in a grunge band, tweeted a picture of himself with Bono and the Edge to announce the rock stars’ investment.
Alongside his reputation as a global philanthropist, Bono has become a shrewd investor in web technology companies through Elevation Partners, a $1.9 billion private equity fund which he co-founded in 2004.
A $270 million investment in Facebook, buying shares from employees between 2009 and 2010, has already paid dividends. The stake is valued at $1 billion ahead of the social network’s Initial Public Offering this year.
A $100 million stake in Yelp, a consumer business review website, has tripled in value after the company went public last month.
Elevation has also suffered failures. A $117 million stake in SDI Media, a dubbing and subtitle company, went south after it was taken over by debtors and a $325 million investment in smartphone maker Palm, produced a modest $25 million gain.
Bono and Edge were introduced to Dropbox by entrepreneurs Ali and Hadi Partovi, who were investors in the company. The Partovi brothers created a Facebook music video-sharing app, iLike, which Bono endorsed by giving an interview.
Dropbox, described by Forbes magazine as “tech’s hottest start-up”, offers its storage service for free but is marketing a $20 a month upgrade for heavy users requiring 100Gb of storage. Each day 325 million files are saved through Dropbox.
Elevation said it was looking to make smaller investments, of $25 to $150 million as it seeks to raise a new funding round of $1 billion.
Elevation is run by a former Apple executive, Fred Anderson with Bono listed as managing director. The star does not get involved in the company’s day-to-day administration - instead he is flown in to woo targets and potential investors.
Previously Bono and Edge took over The Clarence Hotel in Dublin which they refurbished and transformed into a profitable venture after years of losses. The jury is out on their $75 million Spider-man stage musical, which was
plagued by problems but announced record weekly takings for a Broadway musical in January.
U2’s most recent 360 tour grossed a record £460 million but the band have been criticised by tax avoidance campaigners after shifting part of their financial affairs from Ireland to the Netherlands.
The move, a response to a 2006 cap on tax breaks for artists in the Republic, was defended by the band, who said they paid taxes all over the world since 95 per cent of the business was outside of Ireland.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies