Nearly too hard to believe, but Box has managed to secure a stomping, great US$ 125 million in funding for enterprise expansion, including US$ 100 million from a single investor, General Atlantic (GA).
Box’s Investment Round
For that US$ 100 million investment, General Atlantic (GA) gets to put one of its own on the board of directors, who comes in the shape of Gary Reiner, current operating partner with GA and former Chief Information Officer (CIO) of General Electric.
Reiner's appointment to Box's board of directors follows the appointment of former VeriSign CFO Dana Evans.
That’s all pretty impressive, especially for Box, whose CEO hasn’t quite reached 30 years-of-age, but it looks like it will pale in significance once Box starts pumping the money into the enterprise.
According to Aaron Levie -- that annoyingly young CEO -- the money will fund support for Box’s growing enterprise base, as well as global expansion and improvements to its file sharing technology.
Box, Technology Confluence
The problem, as Levie sees it, is one of confluence and more notably, how technologies are transforming the way we access and use information. Companies that don’t keep up with technologies, or develop technologies that users want to use will be left behind.
From a product point of view, this is what Box is looking to do:
The confluence of cloud, mobile and social technology is transforming how every enterprise and individual manages information today ... This new funding allows us to invest aggressively in the talent, technology and global expansion efforts required for Box to sit at the center of this shift and define the next generation of enterprise software."
Not that there appears to be any issue with the products from a user prospective. Box says that it has now more than 7 million individual users worldwide as well as 120,000 business customers including 92 percent of Fortune 500 companies.
And it’s still growing. Levie claims that 250,000 users are joining every month, which sounds slightly on the high side give the 7 million figure already mentioned.
However, that’s really only splitting hairs at this level of participation. What is certain is that a huge number of people are signing up every month, which explains why GA was happy to come on board with the amount of money it did.
And then there’s the international presence that has to be assured. It already opened an office in London, as well as data centers from where it supports blue-chip clients like McAfee, Netflix and Random House, as well as Proctor and Gamble.
In addition to GA, other participants in this latest round of investment include current Box investors Bessemer Venture Partners, DFJ Growth, New Enterprise Associates, SAP Ventures and Scale Venture Partners, as well as new investor Social+Capital Partnership.
Box As Take Over Target
So what’s really going on here? The economic context of this deal is a market where companies like Microsoft are prepared to pay US$ 1.2 billion for enterprise social network company Yammer, or Oracle’s acquisition of human resources software vendor Taleo for US$ 1.9 billion. Also keep in mind that SAP paid US$ 3.4 billion last year for SuccessFactors.
Despite the economic climate in Europe, US companies have the money and the will to buy whatever elements they are missing in the social business space.
From a product point of view, Box’s purpose is to share and manage content on a secure platform and is competing successfully with the likes of Google and Microsoft in the cloud and in the business content management space.
As a result, it is an interesting target for takeover, and would probably have been a lot more attractive without the US$ 125 million. As it is, the money just raised will keep the predators at bay and enable Box to pursue its vision.
On the Box blog, outlining why Box has taken the money, Levie outlines what that vision is. He says:
If Microsoft’s vision was to put “a computer on every desk and in every home,” then the vision of Box (and the post-PC movement more broadly) is to get the right information into every individual’s hands. We believe that companies with cloud, mobile and social in their DNA are best positioned to serve the increasingly dynamic needs of today’s enterprises."
He sets Box up with the likes of Workday, Yammer, Atlassian, Salesforce and Jive that are leading this shift to social business and says that this transformation is only beginning.
Box, if you remember from the early days, had set itself up to replace SharePoint as a collaboration platform. But this seems much greater than that. Box sees itself as one of the pioneers in the changing landscape of the way enterprises do work. And now he has another US$ 125 million to pursue that vision.