Box Wants $162.5 Million from Long-delayed IPO, Channel Partners Key to Growth

Written by DH Kass 1
January 11, 2015

Box will price its initial public offering at $11 - $13 a share, offering 12.5 million shares of common stock to raise some $162.5 million and peg its market value at $1.55 billion.

Cloud storage provider Box will price its months-delayed initial public offering (IPO) at $11 – $13 a share, offering 12.5 million shares of common stock to raise some $162.5 million and peg its market value at $1.55 billion, according to an updated S1 SEC filing dated January 9, 2015.

Last summer, Box landed an unusually timed $150 million capital infusion from private-equity firm TPG and hedge fund Coatue Management that valued the company at about $2.4 billion.

For the nine months ended October 31, 2014, Box lost $121.5 million, a 3 percent improvement from the same period a year earlier, on an 80 percent increase in sales to $153.8 million. The company claims some 44,000 paying subscribers, 32,000 registered users and 4 billion content interactions every quarter.

“Our paying business customers include more than 48% of Fortune 500 companies and more than 22% of Global 2000 companies, and our over 32 million registered users include employees from 99% of Fortune 500 companies, including companies in highly regulated industries such as healthcare and life sciences, telecommunications, energy and financial services,” Box said in its IPO prospectus.

The company counts among its largest customers Ameriprise Financial, Bechtel, Eli Lilly, Gap, Schneider Electric, Sunbelt Rentals and Viacom.

Box said its market opportunity hinges on an expected 40 percent boom in the number of so-called information workers to 865 million by 2016, based on researcher Forrester’s data, and a spike in the number of mobile workers to 1.3 billion by 2015, as IDC figures. Its growth strategy spans increasing its customer base globally, gaining a strong presence among existing clients, targeting industry verticals, building a stronger channel partner network and expanding its platform ecosystem.

“With an increasing number of information workers, industry trends toward cloud and mobility, and the increased need for global collaboration, we believe the market opportunity for Enterprise Content Collaboration is significant and growing,” Box wrote.

The company made a number of moves in 2014 not only to propel its enterprise business ahead but also added some rebar to its IPO prospects. In December, Box initiated Box Trust, its own security coalition of brand-name providers collaborating to ensure the vendor’s business customers the safety of their data.

And, in May, Box caught a huge public relations wave on the heels of postponing its IPO, when mega-colossus General Electric (GE) signed on to use the company’s technology across its entire network of some 300,000 employees. The contract added to earlier Box big deals for a 65,000 seat license with Schneider Electric and a 30,000 seat agreement with Proctor and Gamble.

Underwriters on the offering include Morgan Stanley, Credit Suisse and JP Morgan, as well as BMO Capital Markets, Canaccord Genuity, Pacific Crest Securities, Raymond James and Wells Fargo.