Box Files to Raise $250 Million in Cloud-Storage Share Sale
Box Inc. has unpacked its financials for public investors.
The cloud-storage provider whose users include Procter & Gamble Co. (PG) and Pandora Media Inc., filed yesterday to raise $250 million in an initial public offering. The company didn’t specify the number or price of Class A shares it will offer in the regulatory filing, using the figure as a placeholder to calculate registration fees.
Sales at Box, based in Los Altos, California, doubled to $124 million in the fiscal year through January, according to the filing. The company, led by 29-year-old Chief Executive Officer Aaron Levie, remains unprofitable, as sales and marketing costs climbed 73 percent to $171.2 million, 38 percent more than the company generated in revenue. Box has been adding sales representatives to promote its Web-based software as businesses shift to the cloud.
Class B common stock will be entitled to 10 votes per share, while Class A shares will have one vote, the filing shows. Box plans to use the proceeds from the offering for sales and marketing and capital expenditures. Revenue is projected to top $200 million this year, people familiar with the matter said March 7.
The Jumpstart Our Business Startups Act enabled Box to file confidentially because it has annual sales of less than $1 billion. Now that the prospectus is disclosed, Box must wait at least 21 days before officially marketing the deal to investors, known as a roadshow. Morgan Stanley, Credit Suisse Group AG and JPMorgan Chase & Co. are leading the offering.
In the prospectus, Box lists Citrix Systems Inc., Dropbox Inc., EMC Corp., Google Inc. and Microsoft Corp. as competitors. They’re all vying for iPad and smartphone users who are sharing more documents and data on their devices. Cloud-business software companies including Workday Inc. (WDAY), ServiceNow Inc. and Veeva Systems Inc., all have surged since their public-market debuts in the past few years.
Since the beginning of 2012, 12 business-software companies in the U.S. have raised at least $100 million through IPOs. Those companies currently trade on average for 18.8 times revenue over the past 12 months. At a similar multiple, Box would be valued at about $2.33 billion.
Box was founded in 2005 by Levie and Dylan Smith, while the two were still college students. They raised seed funding from billionaire Mark Cuban that year and then moved the business to Silicon Valley. Box has since raised hundreds of millions of dollars from investors including Draper Fisher Jurvetson, U.S. Venture Partners, General Atlantic LLC, Scale Venture Partners, Bessemer Venture Partners and Meritech Capital Partners.
Draper Fisher Jurvetson is Box’s biggest investor with a 26 percent stake, followed by U.S. Venture Partners at 13 percent and General Atlantic at 8.4 percent. Levie owns 4.1 percent of the company.
Box intends to apply to list its shares on the New York Stock Exchange under the symbol BOX.
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