Investors Betting Big on the Box

by Jordan Richardson on February 28, 2011

Investors and venture capitalists are betting big on Box.net, a website based out of Palo Alto, California. The site deals in online storage and file sharing and has thus far fetched $48 million in investment capital.

The story is receiving a lot of attention because the site’s CEO is a 26-year-old college drop-out. No, it’s not Mark Zuckerberg. Box.net was started by Aaron Levie, a student who dropped out of the University of California to focus on the big idea.

That big idea was a big gamble for Levie and all he had was the $11,000 backing of Box.net co-founder Dylan Smith. Smith actually won the $11,000 in poker games.

Since those days, Box.net has raised about $80 million – including the $48 million banked from Thursday’s investments. The site’s supporters believe that it offers an “indispensable service.”

“We think it may be reaching an inflection point,” George Bischof, managing partner of Meritech Capital, said.

Savvy readers will notice that Meritech Capital also invested in Facebook back in 2006. Another investment group interested in Box.net is venture capital firm Andreessen Horowitz. They also invested in Zuckerberg’s creation.

For many young entrepreneurs, stories like these are encouraging and exciting. Our online world has granted countless business opportunities and there is no better time to create and invent. Investors are snapping up ideas and shelling out large amounts of cash hoping to catch on with the next big thing, whether it’s social networking or online storage.

Box.net finished last year with five million users and currently has a market value below $1 billion.

Users of Box.net essentially store information in the “cloud” and access it using any device with an Internet connection. This creates a more fluid workspace for businesses, as it allows workers from around the globe access to the information from any source at any time of the day. It has potential with respect to saving money and its enterprise-focus is creating a lot of friends in the business community.

As for public offerings of Box.net stock, Levie says that won’t be happening just yet. Look for that opportunity around 2013.

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Written by: Jordan Richardson. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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