Wed, Mar 26, 2014 - Page 15 News List

Web storage provider seeks US$250m IPO

AP, SAN FRANCISCO

Online storage provider Box is seeking to raise US$250 million in an initial public offering that will become the latest test of investors’ interest in rapidly growing technology companies suffering huge losses while being led by a precocious CEO.

With Monday’s IPO filing, Box Inc took the wraps off its finances for the first time since the Los Altos, California, company was founded nearly nine years ago by college dropout Aaron Levie and his friend, Dylan Smith. The documents show Box has lost a total of US$337 million since the end of 2011 alone, including a US$169 million setback during its last fiscal year.

Levie, 29, serves as Box’s CEO while Smith, 28, is the company’s chief financial officer.

“At times, we may get some things wrong, but we respond quickly and ‘fail fast,’” Levie wrote in a letter accompanying the IPO filing.

“More often, however, our speed affords us an incredible competitive advantage,” he added.

Although he is still relatively young, Levie is well regarded in Silicon Valley and has become known for a glib sense of humor that has helped attract more than 90,000 followers to his Twitter account.

He also joined another 29-year-old technology whiz, Facebook Inc CEO Mark Zuckerberg, among a contingent of Silicon Valley executives who met with US President Barack Obama in Washington last week to vent their frustration with the US government’s surveillance of Internet services.

Box’s losses have mounted amid increased spending on service improvements and payroll expansion.

The company has tried to take advantage of demand for online storage services that store digital files in remote data centers so people are able to fetch the content on whatever device that they may be using at the time.

The demand for online storage — part of a phenomenon known as “cloud computing” — has been rising with the growing popularity of smartphones and tablets that have made it easier for people to go online wherever they have an Internet connection.

Box now has more than 25 million users, including many who use the service through subscriptions paid by their employers, according to the IPO filing.

About 225,000 organizations rely on Box’s service, including more than 34,000 that pay fees, the documents said.

The subscriptions helped Box more than double its revenue last year to US$124 million, up from nearly US$59 million last year.

The company has nearly tripled its payroll since 2011 to about 1,000 employees, according to the IPO filing.

The demand for online storage is confronting Box with tougher competition.

The rivals include Dropbox, a more consumer-focused service that is considered to be another prime IPO candidate.

Both Google Inc and Microsoft Corp are pushing their own online storage services more aggressively and tying them to mobile operating systems.

Monday’s filing did not set a price range for the Box shares or how much stock will be sold. Those details usually emerge as the IPO nears completion, a process that often takes three to four months.

The IPO’s US$250 million fundraising target also could change as investors gauge the investor demand.

The company plans to list its shares under the ticker symbol “BOX” on the New York Stock Exchange.

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