Thursday, March 27, 2014

Box’s IPO and S-1

Box’s S-1 statement:

Because we are still in the early stages of our development, we do not yet have enough operating history to measure the lifetime of our customer relationships. Therefore, we cannot predict the average duration of a customer relationship for the 2010 Cohort or for customers acquired in other fiscal years. We also cannot predict whether revenue from the 2010 Cohort will continue to grow at the rate of growth experienced through January 31, 2014, or whether the growth rate of other cohorts will be similar to that of the 2010 Cohort. We may not achieve profitability even if our revenue exceeds costs from our customers over time.

Tomasz Tunguz:

Box is among the fastest growing SaaS companies at this point in its life. Box’s revenue grew 110% in the last twelve months, about 2x the average rate of 53% of a SaaS company in its ninth year.

[…]

Box’s burn rate is twice as large as the next comparable firm, and nearly 10x the average. To drive its torrid revenue growth in the last 12 months, Box burned $168M, which is more than twice the next-most-cash-lax company, ServiceNow, which burned $74M in its ninth year en route to generating $424M in revenue.

[…]

Box spends about 137% of their revenue on sales and marketing.

[…]

Box spends nearly 3.7x as much on sales and marketing as research and development.

David Heinemeier Hansson has also been tweeting about this. The numbers give a very different picture than last fall’s Inc. Magazine story.

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