Cloud storage and collaboration company Box debuted on the New York Stock Exchange at $14 and rose as much as 65 percent on Friday.
Box has been operating at a net loss, but revenue appears to be catching up. For the most recent quarter on record, which ended Oct. 31. 2014, revenue was $57 million, a 70 percent rise from the same period a year earlier. In this period, its net loss shrank to $45.4 million.
Its current stock prices value Box at $2.8 billion – which exceeds the $2.4 billion valuation from its private-funding round in July, as well as an IPO proposal from late 2013 that placed its value at just less than $2 billion.
In an interview with CNBC, Box CEO and co-founder Aaron Levie said Box is making its biggest gains going after the enterprise market, noting that there’s a misconception that Box is in the consumer space. It now has 44,000 paying organizations and 32 million registered users, which gives it significant market share.
Box, however, has been racking up big sales and marketing expenses. Yet, despite the high cost of attracting new enterprise customers, Levie said that once customers are acquired, they tend to expand their services and increase revenue per customer, allowing Box to recoup its costs of acquiring an individual customer after two years.
To differentiate itself from other cloud storage services, Box also allows companies to build custom applications and customizations on its platform around areas like security.
Meanwhile, there is stiff competition in the file synchronization and sharing market, which IDC expects to be worth a total of $2.3 billion in 2018, growing 23.1 percent on average per year from now until then. In IDC’s latest figures on marketshare, Dropbox has 27 percent , Microsoft has 17 percent, and Box has 14 percent of the overall FSS market.
Dropbox has been valued at as much as $10 billion and has 100,000 paying customers. It is actively trying to add enterprise-friendly features, and just this week bought startup CloudOn, which provides cloud-based productivity applications that can be accessed on any device.
There are also new entrants such as Huddle, a security-focused cloud platform which counts public sector among government agencies such as NASA as customers. As well, there is competition from a whole other category of services such as BitTorrent Sync and Mega which allow users to store and sync files across trusted devices via Peer-2-Peer technology.