Box Files For $250M IPO: Weak Finances, But Strong Channel Opportunities

Box, a pioneer in the file sync and share market, on Monday filed for its long-expected IPO, one the company hopes will bring in about $250 million.

In its Monday S-1 filing with the SEC, Box emphasized its cloud-based Enterprise Content Collaboration platform, which counts more than 34,000 organizations worldwide as paying customers, including over 40 percent of Fortune 500 businesses and 20 percent of Global 2000 companies. It also has 25 million registered users, including employees of 99 percent of Fortune 500 companies. Its largest deployment to date has more than 60,000 users.

About 93 percent of Box's registered users are nonpaying users.

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The Box cloud-based Enterprise Content Collaboration platform allows users to access and collaborate on centralized content from anywhere, and can support globally distributed workers with multiple devices, Box wrote in the S-1.

The Box Enterprise Content Collaboration platform also integrates with such third-party applications as Salesforce.com and NetSuite, and can be integrated by third-party developers in new applications, Box wrote.

"To date, tens of thousands of third-party developers have leveraged our platform as the secure content layer for their applications, including developers that are part of our Box OneCloud ecosystem, which provides users with access to more than 1,000 iOS and Android third-party applications," the company wrote.

Even so, Box is still in very much of a startup mode, at least financially.

Box wrote in the S-1 that revenue for the company was $124.2 million for the year ended Jan. 31, 2014, which was over five times the revenue of $21.1 million it recorded for the year ended Dec. 31, 2011.

The company's losses, however, have been just as spectacular as its revenue. Box reported a loss of $168.6 million for the year ended Jan. 31, 2014, up from a loss of $50.3 million two years earlier. The company's accumulated losses totaled $361.2 million as of Jan. 31, 2014.

NEXT: Scaling The Business, Scaling Partnership Opportunities

"These losses and accumulated deficit reflect the substantial investments we made to acquire new customers and develop our services. We intend to continue scaling our business to increase our number of users and paying organizations and to meet the increasingly complex needs of our customers. We have invested, and expect to continue to invest, in our sales and marketing organizations to sell our services around the world and in our development organization to deliver additional features and capabilities of our cloud services to address our customers’ evolving needs. We also expect to continue to make significant investments in our datacenter infrastructure and in our professional service organization as we focus on customer success," Box wrote.

Channel partners can expect more professional services opportunities from Box, according to its S-1 filing.

"Professional services may also be performed by a third party or a combination of our own staff and a third party. Our strategy is to work with third parties to increase the breadth of capability and depth of capacity for delivery of these services to our customers," Box wrote.

Even as Box expects to increase its direct sales force, the company also anticipates growing reliance on channel partners, including "alliance partners, distributors, system integrators and developers" to "market, resell, integrate with or endorse our services," the company wrote.

PUBLISHED MARCH 24, 2014