A cloud based document sharing start-up service based in Silicon Valley, called Box, has recently filed for an initial public offering (IPO). The IPO is likely to be valued at a little more than $2 billion according to experts. The move to raise an IPO has put the nine-year old tech start-up in line, joining the series of tech IPOs that are anticipated later this year. as These companies are rushing to make the most out of conducive situations for social media, cloud and mobile providers in the tech sector.
Box valued at $2 billion
Box had been valued at about $2 billion under the provisions of the US Securities Reform Act that allows companies with revenues less than one billion to keep the process confidential until the time of sale. The social media giant Twitter has also used the same process, keeping its plans for IPO private until its shares went on sale last year.
Aaron Levie, the CEO for Box has signaled on more than one occasion that the company would be actively pursuing an IPO in 2014. The early filing was a move that was expected as the company is in need of cash. The tech start-up has already secured about $400 to $500 million through private equity firms, as well as venture capitalists in a race to secure its position in the market with respect to online cloud storage. The company even aims at collaborating with other industry giants such as Microsoft (NASDAQ: MSFT) and Google (NASDAQ: GOOG)
Need for IPO
Box has developed a greater need for cash compared to other similar services such as Dropbox. Box relied on its sales and marketing spending to attract businesses and new customers, which is a completely different approach as compared to those that have been adopted by other cloud services. Dropbox has also started catering to businesses and is likely to pursue an IPO later this year. The company has been valued at $10 billion after its recent round of fund-raising that took place in December. This is yet another reason Box is strongly pursuing an IPO at present.
The tech start-up Box at present has hired Morgan Stanley (NYSE: MS), JPMorgan Chase (NYSE: CS) and Cridit Suisse (NYSE:CS) to lead the sale of shares. The company, on the other hand, has reported that they do not have anything to share at this juncture and are continuing to build their business by expanding customer relationships on a global level.