The local face of cloud storage showed its hand last week, sharing financial information about its approach to online file management.
The Los Altos-based Box Inc., located at 4440 El Camino Real, published plans for an initial public offering March 24, detailing the opportunities and risks it faces in the race to dominate cloud sharing. The company is looking to raise up to $250 million, adding to the more than $400 million generated in earlier rounds of fundraising, which most recently valued the company at more than $2 billion.
When companies plan to sell stock to the public for the first time, they must file a lengthy document with the federal Securities and Exchange Commission that investors can use to weigh the merits of a stock purchase. The filing includes some of the most detailed business and financial information released by private companies.
In Box’s case, analysts learned that the company has experienced losses in recent years as it competed with companies like Dropbox Inc., Google Inc. and Microsoft Corp. Last year, Box reported $169 million in losses, driven in large part by sales, marketing and a hiring spree that more than doubled the company’s size to nearly 1,000 employees. But while losses had slightly increased in 2013 over the previous year, revenue doubled, with enterprise and individual clients bringing in $124 million.
Box officials acknowledged that their rivals have raised more money and aggressively established their own name recognition as cloud storage services.
“We do not expect to be profitable for the foreseeable future,” Box leaders warned among the risks listed in their filing.
Company officials cited real or projected intrusion by hackers and government snooping as two risks to its business reputation. To protect user information against disaster, Box backs up to data centers in California, Nevada and an unnamed location on the East Coast.
When Aaron Levie founded Box in 2005, he first oriented the company toward businesses that needed to buy and organize storage space online. Since then, the company has maintained its enterprise focus but also started offering free individual consumer accounts.
“We are moving toward an information economy, where every worker will be an information worker, and every business, regardless of industry, will be in the information business,” Levie wrote in a letter to investors.
Only 7 percent of the company’s individual users pay for the service, and Box’s business model depends on steering free users toward paid corporate subscriptions with extra features. Its success, Box officials wrote in the filing, depends on prompting individual freeloaders to request business accounts at their workplace.
For more information, visit box.com.