Box Plans IPO for 2014

According to researcher The Radicati Group, the enterprise content management (ECM) market is projected to grow 15% annually over the period 2012 through 2016. The market is estimated to have been worth $4.4 billion last year and is projected to grow to $7.5 billion by the year 2016. Another report by Frost & Sullivan also projects strong growth for the ECM market. Frost & Sullivan estimates the market to be worth $7.92 billion by the year 2017.

Box’s Offerings
Growth in the ECM industry is spurring market speculation that start-up Box may be getting ready for an IPO. Los Altos–based Box provides more than 15 million users with access to secure cloud content management and collaboration solutions. Through its tools, users are able to share content online so that users can access files from anywhere. Box has also integrated their file sharing tools with Google Apps and Salesforce.com to enable content management and collaboration. Their mobile apps let users access content on the go using any device anywhere.

Box earns revenues by charging a subscription fee from their customers. Smaller customers are charged a fee of $15 per user per month, while bigger enterprises are offered an undisclosed enterprise price. Premium features available on higher-priced subscriptions include unlimited cloud capacity and enhancements such as integration with Salesforce.com, group-based access to files, version control edit system, and dedicated support. Its financials are not publicly disclosed, but analysts estimate that it was on track to record $85 million in revenues last year. They had recorded revenues of $11 million in 2010 and have been growing between 150% and 200% annually since.

Box’s Market Expansion
As part of its IPO plans, Box is working to grow operations internationally and by expanding its product offering. Recently it set up operations in London to help grow their European footprint and plans to open offices in Germany and Japan as well. Earlier this year, it partnered with Europe’s startup accelerator, Seedcamp. Through the partnership Box will be able to scope out the 80 early-stage companies that Seedcamp is associated with to see if it wants to integrate further with them. Seedcamp will be able to provide funding as well, if it is needed for such integration.

As part of its product expansion, Box recently released a number of new enterprise-grade security features. The new features include the ability to lock down content by the device that employees use and the introduction of a new control that allows administrators to restrict individual users from creating externally shared folders. In addition, it introduced an enhanced security detection algorithm that will be able to detect and prevent unexpected user log-ins.

Box has also been making several small acquisitions. Last month, it acquired France-based file storage app Folders for an undisclosed sum. Folders is a mobile-exclusive app that was created to simplify file sharing. Box currently has an iOS app available, but it is working to improve the application. It plans to integrate Folders into this new iOS app. It also acquired HTML5 document embedding service Crocodoc. Crocodoc is known for its HTML5 embedding technology for consumer and enterprise web and mobile applications. Using their service, customers can embed PDFs, PowerPoint or Word documents into any web or mobile app using a simple iFrame or JavaScript library. Crocodoc has a customer base of  more than 100 companies, and Box plans to leverage Crocodoc’s talent and tool to re-engineer the way documents are stored and collaborated on on the Internet.

To date, Box remains venture funded, with $284 million received from investors that include Draper Fisher Jurvetson, US Venture Partners, Scale Venture Partners, Meritech Capital Partners, Emergence Capital Partners, Andreessen Horowitz, Salesforce, New Enterprise Associates, and General Atlantic. Its latest round of funding held in July 2012 helped raise $125 million at a valuation of $1.2 billion. Box is said to be looking for an IPO by next year. Valuation expectations are likely to be north of $2 billion.