Cloud storage firm Dropbox has today raised the price range for its initial public offering by $2 as investors bid strongly for the first big tech IPO this year ahead of final pricing expected tomorrow. 

The company now expects the offering to be priced between $18 and $20 per share, up from its previous range of $16 to $18. 

The new price range suggests the San Francisco company, co-founded in 2007 by Andrew Houston and Arash Ferdowsi, will hit the public market valued at up to $7.85 billion and the IPO will raise up to $720m. 

But despite the bump in price, Dropbox's valuation is still well below the $10 billion that it commanded in a 2014 private funding round. 

Sources had told Reuters on Monday that the offering was oversubscribed. 

Dropbox's IPO is being closely watched by the investment world for signs of the strength of enthusiasm for tech unicorns - young companies valued at more than $1 billion. 

The company has 500 million users and competes with Alphabet's Google, Microsoft, Amazon.com. Box Inc is its main rival. 

The order book for the IPO closes at midday today and the pricing is expected tomorrow. 

The stock will make its market debut on the Nasdaq on Friday.