Box fuels doubts over IPO

Box was valued at just under $2bn at its latest funding round last December, and is regarded one of the fastest-growing players in the cloud computing sector, which was last year considered to be the sweet spot of the technology industry.

However, cloud computing businesses, which sell online software to other companies, have fallen from grace over the past two months, leading a wider decline in technology stocks.

One of Box’s major competitors, Workday, has lost around a quarter of its value since Box filed its S-1, pre-flotation documents, while an index of 37 different public cloud companies tracked by venture-capital firm Bessemer Venture Partners has lost $58bn in market value over the past two months, hitting a record low this week. Bessemer is one of Box’s backers.

It is thought that Box is still keen to take the company public, although it is understood that it has no timeline in mind. Under Securities and Exchange Commission rules, companies are able to float at any time after they file their S-1 documents.

However, analysts are sceptical that the company will be able to win enough support from investors.

"Eighteen months ago that company could have got away without a path to profitability," Kevin Stadtler, principal at investment fund Stadtler Capital Management, said, adding that is no longer the case.

Sam Hamadeh, founder of PrivCo, the analysis firm, argued that Box will have to pull its IPO, and that selling the business is now its “only realistic option”.

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