Box Raises $150 Million In Cash And Reports 2014 Sales Growth As It Crawls ...
After delaying its IPO in an uncertain market this spring and facing some concern that the company was burning through cash, enterprise company Box inched a bit closer to going public Monday by announcing a $150 million cash injection and updating its S-1 documents to show 2014 growth.
The money come two specialists in late-stage private tech companies, TPG Growth and hedge fund Coatue Management. TPG Growth's known for investments in companies like Airbnb and Uber, while Coatue has backed companies including Snapchat and Lyft. Box sold the new shares at a slight bump in valuation from $18 per share to $20 per share, meaning the company's now worth $2.4 billion.
In Box's updated numbers, the company showed soaring revenue alongside continued rising costs. Revenue jumped 94% in the first quarter for 2014 from the same period the year before, up to $45 million from $23 million. The company lost $38 million for the quarter compared to $34 million the year before.
Potential investors may be heartened to see that the company, which has traditionally been known for cloud storage and is now trying to tackle other sharing use cases within the enterprise, has revenue growth coming at a relatively lower cost of sales and marketing.
Box spent just 40% more on marketing to get to the 94% increase in sales. Operational costs did increase too, meaning the company's burning a about $2 million more per month than at the end of the year. But as Box supporter have long argued, the company's subscription model means it has to spend substantially to grow at a fast rate, as the majority of Box users don't pay for the service and those who do take some time to earn the company money. The key numbers there of paying customers and deferred revenue, both improved in 2014 so far. Box had $89 million in deferred revenue from subscriptions as of April 30, 2014, compared to $45 million the year before. It's added 5,000 paid corporate accounts and says about 2.2 million of its 27 million registered users are now paying customers.
Box had previously raised $100 million in December at a slightly lower $2 billion valuation, meaning it's now raised about $450 million to date in at least seven separate raises. Its largest venture investor remains Draper Fisher Jurvetson, which owns 25% of the company, and U.S. Venture Partners, which owns almost 13%. Including options, cofounder and CEO Aaron Levie owns about 5% of Box and is unlikely to join the Forbes billionaire ranks unless the stock increases its value a few times over.
The company still had about $80 million in the bank at the end of April 30, meaning it had enough cash to last until the fall if it had maintained its rate of spend. But no company wants to go public running on fumes, and realistically Box's new fund raise buys it time to consider September or October to actually go out.
A spokesperson released the following statement: 'Our plan continues to be to go public when it makes the most sense for Box and the market. As always, investing in our customers, technology, and future growth remains our top priority. TPG and Coatue have great track records with growth companies like Box and we're excited to work with them as we execute on our strategy.'
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