Contact: Brenon Daly
For one pair of money-burning companies, IPO no longer stands for Initial Public Offering – instead, it’s Interminable Private Offerings. Unable to graduate to Wall Street, both Box and Good Technology have retreated, returning hat in hand to the ranks of late-stage investors for their next round of life-sustaining capital.
Good Technology, a mobile management software consolidator that has never come close to turning a profit, drew in another $80m on Wednesday. That comes almost three months after collaboration software vendor Box – a startup that spends more on sales and marketing than it takes in as revenue – pulled in $150m. (Tellingly, Box’s latest round was reportedly done at a flat valuation.)
Taken together, Good Technology and Box have now raised more than $800m in funding from private sources. In comparison, Good Technology had hoped to raise $100m from public investors, while Box plans a $150m offering, scaled back from an original $250m.
The new fundings are a clear setback to both Good Technology and Box, which have been on file to go public since May and March, respectively. Further, it may well give pause to other companies that were looking to Wall Street to subsidize their free-spending ways. After all, an S-1 is an expensive, time-consuming and very revealing bit of paperwork.
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