dropbox_logo_2011.jpgCloud storage is big business and Dropbox (news, site), one of the bigger names, is heading for a massive valuation if rumors are to be believed.

Heading for the High Ground

Dropbox has made a pretty big splash pushing cloud storage to end-users and enterprises and has done so on the back of some fairly meager investment. That will end soon if sources and familiar parties who are talking to Techcrunch are to be believed.

They reckon that a US$ 200 to 300 million investment is on the way that would drive the company's growth and give it an overall valuation in excess of US$ 5 billion. Dropbox recently moved into Japan and will be looking to capitalize on the popularity of its name and the rapid growth in the market before other players start to build momentum. Perhaps this potential new funding can also rid it of the privacy issues that are currently raising concerns.

Who's in the Box?

With Apple and Google both making big plays in the cloud, this space could get very crowded, very quickly. The new investment will help Dropbox compete and expand, and either set the company up for a major acquisition in the future or an IPO if the current rise in activity continues to prove lucrative.

The service claimed over 25 million users  back in April and could well be over the 30 million mark by now, suggesting dramatic growth. How many of those have upgraded from the free to the two paid-for services will be key to the company's success.