Investors Betting On Box As Hot New Commodity For Businesses
Investors are making a big bet on a promising Internet company called ‘Box‘ that offers online storage lockers for personal and corporate information.
The privately held company is getting $48 million from a group of investors and financiers, including two of Facebook’s major shareholders: Venture capital firms Meritech Capital and Andreessen Horowitz.
Box is being run by 26-year-old Aaron Levie who dropped out of the University of Southern California in 2005 to create the company.
His idea was backed by $11,000 from his longtime friend and Box co-founder Dylan Smith.
Box has raised about $80 million since then, including the $48 million announced Thursday.
Its backers are convinced that the company’s service has a good chance to become an indispensable business tool.
"We think it may be reaching an inflection point," George Bischof, managing partner of Meritech Capital, told The Associated Press.
Bischof said he sees some parallels to where Facebook was in its evolution when Meritech invested in that company in 2006. It was right about the time that Facebook became available to all corners after initially confining the service to college students.
Facebook has since grown from about 12 million active users to over 500 million today.Â
Levie will not reveal the market value implied by the latest investment in Box, but indicated it is below $1 billion.Â
Box users can upload various documents and other content to the company’s computer centers. Storing information this way means that it can be called up on any device with an Internet connection. This makes it easier to share data with co-workers and other people.
The main focus for Box is the business market, which is more mundane than some of the other investments that Andreessen Horowitz has made in more widely used Internet services.
John O’Farrell, a general partner at Andreessen Horowitz, said "Enterprise software is a less sexy space, but that has created a huge opportunity for investors like us."
Box offers individual storage accounts with up to 5 gigabytes of storage for free. It tries to bring in revenue by persuading companies to pay $15 per user annually to get 500 gigabytes of collected storage as well as administrative powers that allow them to control access to the information.
Corporate customers can get unlimited storage for up to $35 per user. Box says that its revenue tripled last year.
Levie said that Box will not offer an initial public offering until at least 2013.