Box Raises Share Price, Valued At £1.1bn On Eve Of IPO

Shares sold as part of Box’s long-awaited initial public offering (IPO) will cost $14 (£9.34) a piece, more than the $11-13 range suggested by the company earlier this month, giving the cloud firm an estimated value of $1.67bn (£1.1bn)

Up to 12.5 million shares will be made available on the New York Stock Exchange (NYSE) and trading is expected to start today, bringing an end to the long-running saga and initiating a highly anticipated floatation in the technology sector.

Box originally filed for an IPO in March 2014, announcing plans to raise $250m (£181m). However it postponed these plans following uncertainty in the market and instead secured $150m (£93m) in another round of private investment last summer.

Box IPO

Last year, Box COO Dan Levin told TechWeekEurope that the company would go public at an “appropriate time” with stronger investor confidence following the latest round of funding.

“We were a little unfortunate with the timing of the unveiling of our S-1 in late March, but we continue to be very pleased with the performance of the business,” he said the firm’s Boxworks event in San Francisco in September. “We continue to feel that the credibility and visibility of being a listed company is important for an enterprise software company and it’s a path we’re on.”

These plans were reiterated in December, when Box updated its S-1 filing, a document that must be completed by all companies wishing to list publically in the US, with the SEC.

Updated, but unaudited figures, for the nine months leading up to the 31 October 2014 revealed that Box’s revenue had revenue has risen year-on-year from $85m to $154m during the period, as the number of paying customers jumped from 34,000 to 44,000.

However the cloud specialist is still not profitable, recording a three-quarter loss of $121.5m – although this is less than the $125.2m it lost during the same time last year. These losses can be partly explained by high sales and marketing costs, which were one of the main concerns about its initial S-1, although they are now less than revenue.

Such expenditure is vital for Box, whose business strategy involves luring in users with free storage before converting them into paid users. It now has 32 million users at 275,000 organisations.

UPDATE: Box has started trading n the New York Stock Exchange:

“We’re in the midst of a profound technology shift, as businesses of all sizes move their critical information and processes to the cloud,” said Box CEO Aaron Levie. “It’s an incredible time to be building an enterprise software company, and we couldn’t be more excited about Box’s future.”

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