Box.net is gearing up to take on bigger players in the enterprise software market. Having recently raised US$ 48 million earlier this year, the cloud storage platform startup has recently updated this Series D financing round with US$ 81 million from Salesforce.com and SAP, with Bessemer Venture Partners and NEA contributing to the round.
In August we reported that Box was after additional funding of US$35 million. It was leaked at the time that US$ 18.6 was obtained, but there was still much work to do.
This updated fourth round financing comes after Box.net rejected offers made by Citrix to acquire the company for $600 million earlier in the year. This round likewise includes prior investments made by Andreessen Horowitz and DFJ Growth. The new capital infusion brings Box.net's capitalization to US$ 162 million and boosts the company's market value to more than US$ 600 million.
From the Dorm Room to the Boardroom
Founded by Aaron Levie and Dylan Smith and initially operating from their dorm room in 2005, Box.net has evolved from a simple cloud storage service to a full-fledged enterprise collaboration tool, which lets organizations and teams coordinate and communicate, while having the capability to add tools from Salesforce, Google Apps, NetSuite, Yammer and others.
Box currently has 7 million users across different industries, and stores 300 million documents to date, providing cloud storage services for 77% of Fortune 500 companies. Credit goes to Box.net's "freemium" pricing structure, which enables startups to use the service for free or for a nominal amount, and then gradually move up the pricing ladder as their needs grow.
Levie says much of the new financing will go to expanding the company's capability, particularly with new server infrastructure, hiring new staff and increased R&D activity. The company plans to open a third datacenter by 2012.
Challenging the Big Companies
Box.net has bigger dreams, and is aiming to establish a cloud platform for computing, particularly focusing on the mobile market. Box.net has announced the launch of the Box Innovation Network, or /bin, a program that will establish a new ecosystem for enterprise applications, with focus on mobile apps.
With more money at its disposal, Box.net plans to "out-innovate" the vanguards of the old enterprise software industry, such as Microsoft, Oracle and IBM. "Businesses of all sizes are moving their information and collaboration to the cloud, and with this new capital we’ll support their transition by continuing to aggressively out-innovate legacy players like Microsoft," says Levie.
With Box.net getting ready for the big leagues, investors even think Box.net might be ready to go public soon. NEA partner Kittu Kolluri says that "Box absolutely should be a public company," citing that the company is eying an IPO sometime in the future. But until then, Box.net will be using its resources to become better at what it does best, which, according to SAP Ventures managing director Jai Das is "helping organizations make better decisions faster by bringing new innovation to business information."