Cloud storage company Box saw its shares surge after finally going public in a $175 million IPO this morning. Shares jumped as high as 77% above the initial public offering price of $14 a share.
This values Box above the $2.4 billion valuation the company received in a July private funding event.
Today’s IPO follows Box’s first aborted attempt to go public in March 2014. CEO Aaron Levie looked at the market in January 2014 and judged the IPO climate right. But media attention on Box’s uncertain gap between revenues and eventual profit put Box on the wrong foot. Box’s supporters have stated that Box needs to continue increasing spending to increase revenue–which was reflected in Box’s April 2014 numbers, which reported $89 million in deferred revenue, up from $49 million the year before. But the market was looking for more stability than Box could promise at the time.
“We built a model and a company that was perfect for one market,” then-senior finance manager of Box David Eckstein told Forbes. “Then the market changed.”
Box halted their public offering and, after a private funding round in the middle of Summer 2014, plotted a January 2015 IPO to go public in a more open, optimistic, and ultimately less crowded time.
Despite strong competition from Dropbox, Levie has managed to keep Box in the tech consciousness, and has offset the ever-cheaper cost of digital storage by expanding Box’s ancillary features, from custom applications and security settings to an in-house consulting arm to guide customers through Box’s services.
Box’s surviving–and thriving–shouldn’t be a surprise: Levie favors adapting to the chaos, as befits the CEO of a 600-person company that takes on storage industry titans Microsoft and Oracle. Levie told PBS’s Charlie Rose that the choice to lunge after the ossified enterprise market made all the difference, avoiding the volatile consumer market dominated by Apple and Google for an enterprise landscape that was impressed with the lean startup’s fast software iteration time compared to sluggish development cycles of enterprise titans.
Box stays scrappy and encourages experimentation, regularly putting on hack events and hackathons to keep its people tinkering. “It’s a way of lowering the organizational cost to experiment, and giving people permission to do something that same day without having to ask or politic, just to see what happens,” Box’s SVP of Engineering Sam Schillace told Fast Company.
This kind of tinkering and “busting the silos” to get ideas from everywhere has paid dividends for Box amid its admitted stumbles. To sync with enterprise appmakers, Box released $Rev in June 2013, a program which lets third-party developers make a bit of money whenever someone engages their app from within Box’s OneCloud mobile app ecosystem.
Box cofounders Levie and Dylan Smith started the company out of their University of Southern California dorm in 2005 to meet the necessity of sharing documents (Dropbox was founded in 2007). Box quickly attracted corporate attention, which promised big money if they developed workplace features, like document tracking and managing multiple users. The attention was intimidating for the small company–but pivot they did, leading to 120,000 business customers by 2012.