Box Files For IPO, Hopes To Raise £181m
Box confirms its long-awaited IPO, but filing with US SEC shows it isn’t profitable yet
Cloud storage firm Box has filed for its long-awaited initial public offering (IPO) with the US Securtiy and Exchange Commission (SEC), announcing plans to raise $250 million (£181m).
The company confirmed the plans in a tweet and its S-1 filing, a document that must be completed by all firms in the US wishing to list publicly, has now been published by the SEC. Box will trade on the New York Stock Exchange (NYSE) under the ticker symbol ‘BOX’ and Morgan Stanley, Credit Suisse and JP Morgan Chase are handling the flotation.
“Box’s S-1 will be publicly filed this afternoon,” read the tweet. “This tweet does not constitute an offer of any securities for sale.”
Box IPO confirmation
It was reported in January that the company had secretly filed its S-1 filing with the SEC, taking advantage of the JOBS regulation that allows any firm with revenues of less than $1 billion to privately file a draft proposal of its IPO prospectus – just like Twitter did last year.
According to the S-1 filing, Box generated $124.2 million in revenue last year, an 111 percent year-on-year increase, but its losses also increased from $112.6 million to $168.6 million. This could partly be explained by the fact that its operating expenses rose dramatically, especially its sales and marketing costs, which soared by 73 percent year-on-year to $171.2 million.
This marketing is essential for Box, whose business strategy involves luring in users with free storage before converting them into paid users. Box currently has 25 million users, but only 34,000 of these are paying customers.
Box has traditionally targeted the enterprise market, but it is increasingly focused on consumers, and offered 50GB of free storage to anyone who downloaded its recently-relaunched iOS app within thirty days of its release.
Its prospectus acknowledges intense competition in the cloud storage space, with Google Drive, Microsoft OneDrive and Dropbox among the companies hoping to secure market share. Dropbox has also been linked with an IPO, with the firm recently valuing itself at £5 billion as it sought fresh funding.
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