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BOX Going For IPO Again

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The WSJ has reported that after many months of delays, the initial public offering for online storage company Box is finally going to go ahead.

Launched in 2005 Net Box a Personal Content Management company, offered free storage for personal accounts.  Moving on to the enterprise market initially with a relatively small venture capital input, reportedly $350,000.

The company launched with Capital venture  plans to list on the New York Stock Exchange using the symbol “BOX”

If successful the planned IPO would value Box at more than $1.5 billion. The company said in its filing that it expects to receive about $134.3 million in net proceeds that it plans to use for general purposes.

In a typical IPO Bankers set a low price for the initial proposed IPO stock price range, and hope to raise the price to match investor demand.

Box has lowered its cost of acquisition to 97% 

Box filed for an IPO in March but later delayed its plans amid weakening demand for business-software stocks and reported worries about the company’s high rate of spending on sales and marketing.

As it prepares to go public, the Los Altos, California company will need to show investors it has lowered its cost of acquisition of new business  without sacrificing too much growth.

Box spent 97 cents on sales and marketing for each dollar of revenue it made in the three months ended Oct. 31 2014, this is a great achievement  compared to the ratio of $1.38 to every dollar of revenue when it first filed for an IPO in March of last year. The company’s loss narrowed to $45.4 million in the latest quarter from $51.4 million a year earlier.

Box’s  burn rate and slow growth will obviously effect  the price investors are willing to pay, revenue rose 70% to $57 million in the latest sales period,  growing 81% in the quarter ended July 31.

One wonders when Box will recognise the SMB channel and deal with resellers and dealers with the ability to infiltrate the SMB hosting community.