Venture Capitalists Flock To Cloud Computing Startup
Dell was born in a room at the University of Austin. Facebook originated from a Harvard dorm. Box.net, tracing its origin to a room in the University of Southern California, may or may not become as large as Dell and Facebook, but if recent indications are anything to go buy, people are willing to bet big money on it.
Box.net, a Silicon Valley startup that offers online file-storage and collaboration software, announced that it has obtained $48 million in fourth-round funding to finance its aggressive expansion plans. Meritech Capital Partners contributed $38 million in equity investment, with Emergence Capital Partners and Andreessen Horowitz, the fund operated by Internet pioneer Marc Andreessen, making up the balance. Hercules Technology Growth Capital Inc. has promised $10 million in debt financing. This increases the total amount raised t0 $77.5 million till date.
To put things into perspective, Meritech Capital had earlier invested in Facebook, NetSuite and Salesforce.com. Andreessen is on the boards of Facebook, eBay and HP among others. Therefore, it is clear that the investors have an established record of backing winners.
“We’re going to be investing quite heavily in our infrastructure, in our R & D, and in our product, to build the next generation of the way that businesses are going to manage and share their data in the cloud,” said Aaron Levie, the 26-year old CEO of the company. He and his friend Dylan Smith founded the company in 2005 with $11,000 won in a poker game.
Since then, Box.com has grown by leaps and bounds among people desiring to store data online. While the basic version of Box’s service is free, it does charge customers $15 a month for extra features like more storage or security enhancements. As of end-2010, it has more than 5 million users at 60,000 companies, including 73% of the Fortune 500.
The company intends to use the cash to double its 140-person staff over the next 18 months, expand overseas and accelerate development of its mobile applications. It will also look to build up an enterprise sales force that will try and convert more free users into paying customers.
The CEO has big dreams and expectations for his company. “This is a revolution that is democratizing enterprise software – the cloud has dramatically leveled the playing field for the delivery of services, and for the first time, technology adoption in the enterprise is being driven by the bottom-up,” he wrote in a blog post. “….Box’s beginnings were modest..We must invest aggressively to continue this success. We are no longer a small startup, but a 140-person strong organization that must do everything in its power to bring better technology to the enterprise.”
By Sourya Biswas