Cloud storage provider Box.net operates at a loss of around $1.5 million each month — or what will be around $18 million for 2011 — we’ve heard from multiple sources.Additionally, two sources said Box.net is now bringing in around $10 million as of the fourth quarter this year. One source said Box.net’s revenue from its enterprise services was growing by 200% each year.
That would put Box.net at around $25 million in revenue (at the high end) for 2011 and at a spend rate of around $43. Two sources close to the company also told us Box.net brings will bring in around $25 million in revenue this year. Given that Box.net is building a third data centre and has its own internal infrastructure, and is in its fifth year of operations, it sounds like a pretty reasonable number.
Box.net CEO Aaron Levie would not comment on the revenue numbers or burn rate, but told us, “The reason we raised the capital we did was to invest in infrastructure and scale out to how we’re doing our sales as well as the R&D and engineering effort.”
He added, “I don’t need to describe the competitiveness and the dynamic nature of the market, we’re going after a space that is a multi-billion dollar market that is still in its very nascent years.”
His company has raised around $160 million across its four rounds of funding. The most recent round was $81 million, led by New Enterprise Associates.
Box.net has 7 million users and around 77 per cent of Fortune 500 companies use its remote storage.
Box.net gave away 50 gigabytes of free storage — which would typically cost $20 each month — to iPhone and iPad owners as a gigantic marketing stunt. iPhone and iPad users downloaded the company’s app around 1 million times in the first five days after Box.net started the campaign, Levie said.
One source stressed Box.net was in a massive land-grab growth mode. That’s not unusual in the tech world — look at Groupon, which has spent an enormous amount of cash and fuelled its growth with massive funding rounds. But Box.net’s situation is a little different than Groupon’s, he said.
“The key distinction between Groupon and the enterprise software market, when businesses make a distinction to what technology they’ll use, they’re really going to stay with that decision,” Levie said. “In the business market they’re gonna buy a single solution, it’s a once in an lifetime opportunity position.”