Dropbox plays catchup to a small startup that just raised $30 million

Dropbox is taking on Quip, a small startup that just raised $30 million today. And Evernote. And Google for Work. And several other companies.

The file syncing company told several publications about the release of a new beta version of Paper, an app for creating and collaborating on documents, on Thursday.

According to Wired, the app is an extension of its note-taking app called Notes, which also rolled out in beta just 6 months ago. Dropbox told Wired that Paper's expanding from "a few thousand people to a few thousand teams" with today's beta roll out. If you go to the Notes page today, you see an invitation to sign up for Paper.

The product was in closed beta so we couldn't test it, and Dropbox hasn't posted any public information on it.

But from what we can tell, Paper seems like a word processing app that lets users create, edit, and collaborate on documents. There are also some interesting features, like automatic embedding of files with a Dropbox URL, file previews within the document, and a more robust search functionality.

The timing of the announcement coincidentally falls on the same day as Quip's big $30 million round of funding. Quip offers similar features as Paper, including document creation and collaboration, as well as real-time commenting and editing. The only difference is Quip runs a much smaller team (less than 20 engineers from what we hear) and already has "millions of users in over 30,000 companies," as Quip CEO Bret Taylor told us.

It's hard to see how Paper will overcome long-established competitors like Quip, Evernote, Google for Work, and others. Dropbox's main advantage is in its 400 million registered users, but it's unclear how or when those users will convert to using Paper. Plus, Dropbox has a history of failing to gain traction with its other standalone apps, as Mailbox and Carousel both didn't gain huge traction since their release.

As we reported earlier this year, Dropbox has previously struggled to capture enough paying business customers to justify the $10 billion valuation it got in its last round, and a couple of mutual funds marked down the value of their Dropbox holdings earlier this month, as The Information reported.

Dropbox told us:

As you've heard, today we're beginning to expand the beta for Dropbox Paper, our real-time collaboration tool built for teams. With Dropbox Paper, teams can express ideas with more than words - code, files, tasks, and even other apps - then bring them all together into one, searchable place. We're continuing to develop the product and are excited to see how early teams use it.

We're not sharing more right now, but you can sign up for an invite at dropbox.com/paper.