Box is shooting for an IPO within weeks

June 1, 2014
Obsession
The Cloud
June 1, 2014

Box plans to launch its highly anticipated IPO in the coming weeks, despite concerns within the company that a once-hot market for technology public offerings had cooled considerably since earlier this year. The Los Altos, California online file-sharing company’s plans to go public this year are “still on track,” with an offering “weeks not months” away, a source familiar with the company’s plans said.

The offering, which had been expected to raise as much as $250 million according to its IPO papers filed in late March, had been slated to debut around April. Then a sharp stock market selloff hit tech companies and prompted Box to delay its plans to sell shares to the public. Officials at the company have been heartened by some recent tech debuts, including cloud-based software company Zendesk, which enjoyed a 27% pop on its first day of trading in mid-May.

A spokeswoman for Box declined to comment on the company’s plans, citing Securities and Exchange Commission rules barring it from talking about its business ahead of any offering. The delayed IPO has resulted in Box having to amend its IPO filing with regulators (known as an “S-1″) to reflect results for its first quarter, sources say. The amended filing may offer investors a clearer picture into the file-sharing company’s growth trajectory.

The amount of money Box has been burning through in order to build its cloud-computing franchise had been a concern for prospective investors. Box reported $170 million in net losses in 2013. Those losses were 50% larger than the prior year. The company also posted $124.2 million in revenues in 2013, more than double the previous year. The company’s ability to grow its revenue and shrink losses will be what prospective investors will likely key in on once Box releases its amended IPO papers, which are expected in the coming days.

Given the swirling uncertainty around the company’s IPO, Box has fielded offers from private investors to launch another round of private funding in lieu of going public, a source said. However, Box is determined to stay the course on its IPO plans, according to sources.

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