Box Inc. plans an IPO in the competitive cloud storage market
In the last article of this series, we discussed the prospects of the cloud storage market in general and Box Inc.’s competitors in particular. We discussed how the online storage market has become competitive, with tech giants such as Google (GOOG), Microsoft (MSFT), and Amazon (AMZN) offering low-cost options, while Dropbox has started to woo business customers. Box Inc. is an enterprise cloud storage provider that recently revealed its plans to raise up to $250 million in an initial public offering. Here, we’ll discuss the ownership structure of Box Inc. and how its valuation stacks up against its similar competitor, Dropbox.
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Box Inc.’s consistent operating losses aren’t a deterrent for investors
Box’s increasing operating losses haven’t deterred venture capitalists from investing in the company. The company’s business model is that of recurring revenue and subscriptions, and it can’t be compared to that of a traditional revenue model. No wonder cloud computing companies such as Salesforce.com (CRM) and Workday (WDAY) have negative EPS but still trade at high valuations. Salesforce.com is currently valued at $34 billion, while Workday is currently valued at $16 billion by the market.
Box Inc.’s ownership structure
As per the above chart, venture capital firm Draper Fisher Jurvetson owns 25.5% of the company, with U.S. Venture Partners with 13.0%, General Atlantic with 8.4%, Scale Venture Partners with 7.4%, Bessemer Venture Partners with 5.6%, and Meritech Capital Partners with 5.1% ownership. Aaron Levie, the chairman and chief executive officer of Box, owns 4.1% of the company. Dan Levin, president and chief operating officer and director of the company, owns 2.0% of the company, while Dylan Smith, the chief financial officer and director of the company, owns 1.8%.