Box courts Hollywood with help from Oseary, Kutcher
SAN FRANCISCO -- Ashton Kutcher and Guy Oseary have invested in Box Inc., a Silicon Valley online storage company on the verge of a hotly anticipated initial public stock offering.
Kutcher and Oseary are backing Box through their A-Grade Investments fund, Box Chief Executive Aaron Levie said in an interview. The investment was part of a $100-million funding round in December that valued Box at about $2 billion.
“They have an unbelievable sense for technological innovation and where markets are going,†Levie said of A-Grade. “Not only are they great investors and partners in absolute terms, they also have amazing expertise that is pretty unparalleled in the media and entertainment space.â€
A-Grade, which also counts Ron Burkle as a partner, has made some smart bets in Silicon Valley including Airbnb, Spotify and Uber.
Kutcher and Oseary, widely known for making Hollywood connections for Silicon Valley companies, have already begun opening doors for Box, which is courting the entertainment industry.
“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.â€
The assist from Hollywood A-listers comes at a crucial moment for Box, whose online storage service for businesses lets employees using the service access files from any device.
The 8-year-old Los Altos, Calif., company has growing competition from well-financed start-ups such as Dropbox Inc., which was recently valued by investors at $10 billion, and technology giants such as Microsoft Corp. and Google Inc.
Looking to beat Dropbox to the public markets, Box confidentially filed paperwork for an IPO earlier this year. It’s expected to make that paperwork public in the next few weeks and is poised to go public this spring, the latest in a series of business software companies such as Workday Inc., which have surged on the public markets.
Levie declined to comment on the IPO.
“Obviously we are very focused on building out an independent company and the path we are on is aligned with that,†he said. “We are going to be growing the business very aggressively this year.â€
As part of that growth spurt, Box has intensified its push into the entertainment industry, one of the largest markets the company serves. It customers include Netflix, NBC Sports, Creative Artists Agency and Sony Music.
Sales from the media and entertainment world grew threefold in the last year. Box wants to become “the software layer for Hollywood,†Levie said.
To that end, he has been spending more time in Hollywood, meeting with movie studios, talent companies and music labels. The 29-year-old CEO even attended the Oscars in his trademark dark suit and blue sneakers and explained cloud computing to actor Harrison Ford.
“We are going to focus on this industry even more this year,†Levie said.
The online storage industry has a receptive audience in Hollywood, Kutcher said.
“Hollywood has been embracing the cloud since before it was called the cloud,†he 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. Box expands the horizons.â€
Driving the growing popularity of this new generation of cloud computing technology: the ability to share and collaborate on documents of all kinds from not just personal computers, but also tablets and smartphones.
Despite some lingering resistance to storing sensitive files on remote data servers, the practice is becoming increasingly common in Hollywood.
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.
Music labels use Box as a digital library, to distribute music to radio stations and to plan concerts and tours. Music managers use Box to collaborate with their artists on the latest tracks and share audio, photos, videos and artwork with promoters and event managers.
“I use Box for everything that I do in management,†said Brian Klein, founder of Iminmusic, which manages Fitz & The Tantrums and Joe Purdy. “I don’t have to walk around with a laptop. I walk around with everything in my pocket on my cell phone and iPad.â€
Box’s biggest moment in the entertainment spotlight so far: the role it played in keeping the wraps on the surprise release of Beyonce’s new album. Using Box, Beyonce and her label, Columbia Records, were able to keep the self-titled album secret until the moment Beyonce was ready to release it.
Levie came up with the idea for Box while a college student at USC. He said he had dreamed of becoming the next Quentin Tarantino or Harvey Weinstein. But during summer internships at Miramax and Paramount, he got a firsthand look at how the industry worked with digital content and thought he had a better way.
He roped in his boyhood pal Dylan Smith, 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.
Now Box has 20 million users in 200,000 companies, and 97% of the Fortune 500 companies use Box, Levie said.
But it all began with the entertainment industry, Levie said. Box’s first business customer: sports marketing and management firm Wasserman Media Group.
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