Box's 'internal issues' could impact IPO, rival claims
Box, about to list on the New York Stock Exchange (NYSE) after delaying its IPO by a year, revealed in its S-1 filing that it's spending large sums of money on a daily basis but Huddle CEO Alistair Mitchell told Techworld today that the company doesn't have "that much money in the bank".
"Their problems are internal," he said. "Over 90 percent of their users are still free and they're spending $1 million a day.
"They have a huge base of people using them for free and cheap storage and they've got to get that under control."
Mitchell said that the demand for enterprise cloud storage and collaboration services like Box is huge so investors could focus on that more than Box's current financials.
Box's platform serves businesses looking for storage, file sharing and collaboration. So far it has attracted 44,000 paying businesses from a wide range of industries, including the likes of General Electric and O2.
However, despite attracting a large number of Fortune 500 customers, the company is still operating at a loss.
"If you look at most businesses when they come to market, their net losses have been much narrower. In the low tens [of millions] versus in the hundreds [of millions]."
Dan Levin, chief operating officer at Box, told Techworld last year that Box's rapid growth to a billion dollar company is thanks to better marketing than its rivals, which helped the firm attract high quality staff and greater investment.
"Box really was all about marketing and not about product," he said at Web Summit in Dublin. "Our product wasn't better than anybody else's in 2009 but our marketing was. We did $5 million (£3.2 million) in revenue or something (in 2009). There were a bunch of people in between two and eight million. We managed to convince the world that we were the market leader."
Box is yet to respond to Techworld's request for comment.