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Box files for $250M IPO on full-year revenue of $124M, net loss of $168M
- deleted 13y ago[deleted]
- gamblor956 13y agoI'm not sure how anyone can look at a growing history of losses due to increasing customer acquisition costs, in an industry with numerous competitors, and want to invest in this.
- waps 13y agoWhy do you think the article mentioned Twitter ?
- stanleydrew 13y agoHow quickly everyone seems to have forgotten the lessons of Groupon.
- oxyboy 13y agoRead this as throwing in the towel with Google announcing cheaper storage plans last week with renewed emphasis on the enterprise mkt?
- jedberg 13y ago$250M feels tiny for a tech IPO (and for an IPO in general). Does anyone have any data around this?
- acchow 13y agoThey are looking to issue $250M worth of stock. That's not their valuation.
- jedberg 13y agoI understand that, but even that feels low.
- _delirium 13y agoIt's reasonably large, I think. If it were in 2013, it would've been around the 5th largest tech IPO of the year, according to: http://www.pwc.com/gx/en/technology/publications/global-technology-ipo-review.jhtml http://www.pwc.com/gx/en/technology/publications/global-tech... Nowhere near Twitter's $1.8 billion, of course, but sub-$100m IPOs also happen, e.g. Aerohive filed for an expected $75m offering last month: http://techcrunch.com/2014/02/13/aerohive-networks-files-for-75-million-ipo/ http://techcrunch.com/2014/02/13/aerohive-networks-files-for...
- jmduke 13y agoZulily raised $253M in their November 2013 IPO (off of a $2.6b valuation), for context.
- rplnt 13y agoAVG Technologies had $128M IPO with over $200M in revenue at that time and being profitable for years prior. Also had 20 years of history and was one of the few leaders on the market with over 100M active customers/users and growing. What company does, how it operates, or how profitable it is doesn't matter. For highly valued (read overvalued) IPO you need to be on the spot. Think Twitter, Zynga, Groupon. They were all at loss IIRC. People buy these sort of stock for short periods of time so they go big and then burst few months or years later.
- acchow 13y agoOdd, some numbers are "whited out": "Based on shares of our capital stock outstanding as of January 31, 2014, upon the completion of this offering, a total of shares of Class A common stock and" Can't figure out the valuation.
- runako 13y agoI think the idea is they fill in these numbers when they get closer to the offering, using values that make sense given the indicated demand.
- Nicholas_C 13y agoYup. There will be a few iterations of the S-1.
- kevinpet 13y agoThe IPO is seeking to raise $250M. The S1 doesn't actually say how many shares they are planning to offer, so you can't say what the valuation would be. I'm guessing somewhere between 5-10 times the $250M.
- programminggeek 13y agoSo, $250M actually falls short of the $292M they are burning through every year. The net loss of $168M a year means the $250M buys them almost 18 months of runway. Their growth looks less impressive when you consider they spent $292M to only grow revenue $65M. In short, they are spending $5 to make $1. It's possible the customer LTV is actually $6 over a period of years, but they might not be able to borrow enough to make it back in time. Am I the only one that thinks that a company turning a profit is not like flipping a light switch? If you have a culture of overspending, you aren't going to wake up money and start running a tight ship.
- iambateman 13y agoCould this reflect pressure from investors for a payday? If they feel this is a moment the market believes the business still has "opportunity" even if they don't expect to see it, so they want the liquidity event. Completely agree about the unflippable profitability switch. Profitability is a direction, not a destination.
- digz 13y agoOf course. The signal here is that investors want to cash out. Even if investors aren't selling shares as part of the offering (haven't read the details yet, so not sure one way or another) and Box is simply issuing new shares and locking up investors for some period of time, this is a path to liquidity for investors. Generally, selling shares is a signal that insiders view the company as overvalued.. otherwise they would hold. If they needed cash, they would issue debt instruments. The market is hot on tech, so get out while the getting is good.
- john_b 13y agoMy understanding of Box is that they focus on enterprise customers more heavily than their competitors. Given upgrade cycles in many large companies, a LTV > $5 is possible. The difficulty and expense of selling a new product to large companies might also explain the marketing budget.
- 13y ago
- neworbit 13y agoI'm somewhat astounded to hear they have 972 employees. I would have guesstimated somewhere below 200. Even with a huge marketing push, I'm a little at a loss for what they all do.
- maaaats 13y agoIsn't that insanely many people compared to what they deliver? Many more than DropBox (300+?) and JottaCloud (~10) without me being able to see why. Edit: You were before me, so added my comment as a reply to you instead.
- _delirium 13y agoThey have a much higher-touch enterprise sales process, so my guess is that most of the extra employees vs. DropBox are sales, customer service, relationship management, etc. Even after the sell, big clients tend to want dedicated account managers, dedicated support staff they know by name, etc. (Still, it does seem like a lot.)
- toomuchtodo 13y agoBased on their revenues, it looks like they need to start charging more if that sort of head count is required.
- nobody_nowhere 13y agoSo is it a service business or a tech platform?
- phillco 13y agoDropbox is actually > 600 now. (Source: dropbox.com/about)
- qq66 13y agoAre you fully aware of what they offer? They have all kinds of well-known and arcane certifications, integrations with a few dozen products that are only relevant to large enterprises, a pretty big third-party ecosystem and the API to support them, and the large team required to sell and support these tools. It's not just file storage for five bucks a month.
- deleted 13y ago[deleted]
- pearjuice 13y agoPump and dump IPO. Mark my words.
- PeterisP 13y agoIs their product actually competitive? I had tried it once long ago, but currently I don't see any particular niche where it'd be superior to dropbox/google drive/onedrive/whatever. What am I missing here?
- bigchewy 13y agoapplications / companies that have security requirements, e.g. healthcare needs BAAs to be signed and Box will do that whereas the rest (of the big players) generally do not
- elpavohombre 13y agoWhat's a BAA? Thanks
- genericresponse 13y agoBusiness Associate Agreement- It's a HIPPA requirement.
- Kikawala 13y agoHIPAA
- mbesto 13y agoYes, it's very competitive. It's pretty much Dropbox but with all of the IT controls that Enterprise must* have. *According to their governance, risk and compliance policies. Dropbox basically fails all of these checks for large companies.
- 7952 13y agoThe question is also how does it compare to an on site system. Most large enterprises have invested lots of money in storage systems that are a technically trivial but essential to the business. Sharing files outside of a company is useful and often problematic. But ironically a lot of large enterprises will block sites like box. Having an ftp style system on your own network is faster to upload and less likely to be blocked by the receiving party.
- orware 13y agoActually a lot of this is surprising for me...I have a buddy that works there right now and while I knew there were bleeding some cash from articles I had read, I was under the impression that they actually were doing better than that financially. The close to 1000 employees is also fairly surprising, but I would agree that it would mostly be on the sales side.
- glasz 13y agolet's gamble, buddies!
- walid 13y agoWill this end up devaluing Dropbox in its future IPO?
- arfliw 13y agoIt will if this IPO is an epic fail, which it looks like it may be...
- walid 13y agoThis is why I'm concerned. With Google pushing the price of online storage down and Box filing for its IPO we might end up with a damaged reputation of online storage companies and result in probably tanking Box's future revenues. The biggest loser will be us consumers since we'll end up with less choices if companies go bust.
- rm999 13y agoI think the only losers will be cloud storage companies if the industry is commoditized and margins are pushed towards zero. The industry is only going to grow, and there will always be competition. Meanwhile, cheaper cloud storage is better for almost everyone. But I don't think full commoditization will ever fully happen - there's a lot of value in trust and dependability in online storage, and these attributes are difficult to quantify. I'm much more likely to go with dropbox or google than some startup, even if the startup is offering much cheaper rates. Also, companies can compete on efficiency and scale, which adds barriers to entry.
- simon_ 13y agoI just read Ben Horowitz's new book, and he describes taking Loudcloud public as a Hail Mary because private markets were essentially too smart to give them any more money at a horrible time (while the original dotcom bubble was in the middle of bursting). Clearly Box is in much better shape, but it's not too hard to imagine that maybe they are rolling the dice on an IPO during a super-hot market in response to feedback from private investors that they were going to have to raise a down (or otherwise disappointing) round.
- mindstab 13y agogotta say it, one of the reasons Dropbox is king is good support for all platforms. Box still ignores Linux so it's a no go for me personally, and my work.
- ASneakyFox 13y agoWhat is box? What do they do? Why do I care that they are losing money? (Though I seem to already have figured out WHY)