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By Avik Das
March 24 Data storage provider Box Inc aims to
raise about $250 million in an initial public offering, becoming
the latest contender from a wave of "cloud-based" companies to
test the frothy market for technology listings.
The highly anticipated IPO follows debuts such as Twitter
Inc and King Digital Entertainment Plc, the
maker of mobile phone game "Candy Crush Saga" which will start
trading on the New York Stock Exchange this week. Box's main
rival, Dropbox, is also expected to hold a high-profile IPO in
the coming months.
Box said its full-year loss widened to $169 million even as
revenue doubled to $124 million. The Los Altos, California-based
company, which lets mostly corporate customers manage and store
data online, has spent heavily in the past two years on wooing
new clients, which now include the likes of Ameriprise
Financial, Inc., Bechtel, Eli Lilly and Co and Gap, Inc.
Although revenue has been growing, the company warned in its
investor prospectus that "we have a history of cumulative
losses, and we do not expect to be profitable for the
Aaron Levie and Dylan Smith, two childhood friends who
co-founded Box in 2005, hold about 4.1 percent and 1.8 percent
ownership of the firm, respectively.
Box's earliest venture backer, Draper Fisher Jurvetson, owns
about 25.5 percent of the company. US Venture Partners, which
announced its first Box investement in 2008, is the
second-largest shareholder with a 13 percent stake.
Box said in a regulatory filing it intends to list its Class
A common stock on the New York Stock Exchange under the symbol
The filing did not reveal how many shares the company
planned to sell or their expected price. The $250 million
mentioned was an estimate purely for the purposes of calculating
registration fees. (r.reuters.com/jaj87v)
HEAD IN THE CLOUDS
The IPO comes at a time of significant growth in the cloud
computing industry, as companies increasingly shift their
computing needs to the Web, but amidst a climate of intense
While Dropbox won plaudits for its ease-of-use and gained
traction among individual users, Levie focused Box in recent
years toward catering to corporate customers who demanded
greater levels of administrative control and security.
Aside from Dropbox, Box also faces competition from some of
the biggest names in the Internet industry, including Microsoft
Corp and Google Inc.
Google this month sharply slashed prices for its online
storage service Drive, which was seen as a competitive move
against Box and Dropbox.
"Some of our principal competitors offer their products or
services at a lower price, which has resulted in pricing
pressures on our business," Box said in its regulatory filing on
Morgan Stanley, Credit Suisse, JPMorgan and BMO Capital
Markets were among the underwriters for the IPO.
Seattle-area natives Levie and Smith founded the company
while students at the University of Southern California and
They dropped out of school and moved their young company
into a Berkeley garage owned by Levie's uncle in 2005 and
obtained a $350,000 investment from Mark Cuban by emailing him
out of the blue.
DFJ led the company's $1.5 million Series A in late 2006.
Cuban sold his shares to Draper Fisher Jurvetson over a dispute
on whether Box should keep the freemium model that Levie
advocated, but the company has since gained other high-caliber
backers, including venture firm Andreessen Horowitz, General
Atlantic and actor Ashton Kutcher.
As the company has grown, Levie, 28, has emerged to become
one of the most outspoken young executives in Silicon Valley.
Known for his quirky style - he typically sports neon-colored
sneakers or laces - and dry sense of humor, he has a knack for
riffing on any number of topics.
"That awkward moment when your startup doesn't have a drone
strategy," he tweeted earlier this month as Amazon was catching
flak for a proposed high-tech delivery strategy.
Smith, who has been serving as the company's chief financial
officer, has opted to stay behind the scenes for the most part
But in 2010, at the age of 24, he appeared on Bravo's "The
Millionaire Matchmaker" reality television program.
(Reporting by Avik Das in Bangalore; Editing by Don Sebastian)