Fast-growing cloud service Box courts Hollywood, music celebs
A technology venture first envisioned by a Mercer Island High School graduate is gearing up to be this year’s most hotly anticipated technology initial public stock offering from Silicon Valley.
Los Angeles Times
Aaron Levie, the 29-year-old chief executive of Box Inc., walked the red carpet at the Oscars this year in a dark suit and tie, pressed white shirt and his trademark neon-blue sneakers.
“I asked about the sneaker dress code,” said Levie, who like many Silicon Valley entrepreneurs doesn’t like anything slowing him down, least of all a pair of dress shoes. “Apparently it was not a problem.”
It was the movie industry’s biggest night, and Levie didn’t waste any time talking up cloud computing to Hollywood stars, including Harrison Ford.
“He seemed to get it,” Levie said of the 71-year-old actor.
Levie, whose 8-year-old, Los Altos, Calif.-based company is gearing up for the most hotly anticipated technology initial public stock offering to come out of Silicon Valley this year, has been spending a lot of time in Hollywood lately.
Sales grew threefold last year, and the entertainment industry has become one of the largest markets his company serves. Levie is looking for an even bigger jump this year.
He has been meeting with movie studios, talent agencies and music labels to get a better sense of what the industry wants from a cloud-computing company.
“We are going to focus on (the entertainment) industry even more this year,” he said.
That focus comes at a crucial moment for Box. It offers an online storage service for businesses that lets the companies’ employees access files stored on remote data servers.
The growing popularity of cloud computing has boosted Box’s fortunes. Businesses want employees to have the ability to share and collaborate on documents of all kinds, not just from personal computers, but also from tablets and smartphones.
But Box has plenty of competition from well-financed startups such as Dropbox, which was recently valued by investors at $10 billion, and technology giants such as Microsoft and Google.
Looking to beat Dropbox to the stock market, Box this year confidentially filed paperwork for an initial public offering. It’s expected to make that paperwork public in the next few weeks and is poised to go public this spring.
Levie declined to comment on the upcoming IPO.
To make inroads in Hollywood, Levie has enlisted some celebrity investors.
Actor and startup investor Ashton Kutcher, and Guy Oseary, Madonna’s manager, have invested in Box through their A-Grade Investments fund. They took part in a $100 million funding round in December that valued Box at about $2 billion.
A-Grade, which also counts billionaire Ron Burkle as a partner, has an estimated $100 million to invest in technology startups and has made some insightful bets in Silicon Valley, including Airbnb, Spotify and Uber.
But it’s not just A-Grade’s deep pockets or Hollywood experience that could help Box: It’s the vast network of connections.
“Guy and I have been working in the entertainment industry for decades,” Kutcher said. “We’ve worked in music, film, television and advertising. We have relationships across a spectrum of businesses that are Box clients and/or could be.”
Brian Klein, founder of Iminmusic, which manages Fitz & the Tantrums and Joe Purdy, was an early convert to Box.
“I use Box for everything that I do in management. I don’t have to walk around with a laptop. I walk around with everything in my pocket on my cellphone and iPad,” Klein said. “I have sat with many other managers and other artists and showed them Box and how I use it, and they fall in love with it immediately.”
While many industries have been reluctant to entrust sensitive files to remote data servers, Hollywood has been doing it for years, Kutcher said.
“Hollywood has been embracing the cloud since before it was called the cloud,” Kutcher said. “Collaborative editing and producing has been happening since this content was being digitized. The previous generation of the cloud was local, on-site servers that multiple artists would access.”
But, he said, “Box expands the horizons.”
Film studios and television networks share casting schedules, collaborate on scripts and send out trailers and screenings. Talent agencies use Box to run marketing campaigns and share publicity materials and scripts with clients.
Levie, who graduated from Mercer Island High School, came up with the idea for Box while a college student at the University of Southern California. During summer internships at Miramax and Paramount Pictures, he got a firsthand look at how the industry worked with digital content and he thought he had a better way.
He roped in his boyhood pal Dylan Smith, also a Mercer Island graduate, who supplied the initial funding with his winnings at online poker. The two got some seed funding from billionaire Mark Cuban and moved to Silicon Valley, where they have raised more than $400 million from big-money investors such as Andreessen Horowitz and Draper Fisher Jurvetson. They decided early on to focus on the business market. In 2011, Box turned down a $600 million takeover offer from Citrix Systems.
Now Box has 20 million users in 200,000 companies, and 97 percent of Fortune 500 companies use Box, Levie said.