Box, the IPO-bound Silicon Valley cloud-storage and collaboration company has hired Villi Iltchev, the executive who led LifeLock’s acquisition of Lemon, to head up its corporate development and acquisition strategy.
Iltchev’s first day at Box was Monday, Box sources confirmed to Re/code. His title is senior vice president for corporate development and strategy, reporting to CFO and co-founder Dylan Smith.
In a brief interview Monday, CEO Aaron Levie said that “M&A will be part of our strategy. It’s pretty core to how we’ve been growing the company, and to how we’ve been extending our service in the enterprise and into different industries.”
While it’s still a young company, Box has used its considerable financial heft — it has raised a combined $562 million from numerous venture capital and private equity investors — to acquire four small companies during the last 18 months with technologies and capabilities seen as complementary to Box’s file storage and collaboration service.
Its latest deal, announced June 17, was for Streem, a Y Combinator-backed startup that allows its users to stream files to desktop computers. Another deal announced last year was for Crocodoc, a seven-person San Francisco-based company focused on Web-based document sharing.
“In every deal we’ve done, we’ve found both a team and technology that we wanted to integrate,” Levie said. “That’s going to be at the core of what we do in the future, and over time the teams will get larger and the technologies more advanced.”
And don’t just expect acquisitions, but more equity investments. Box has already done a limited amount of investing in other companies. For example, last year it took a small stake in Drchrono, an electronic health record startup.
Iltchev was until recently EVP for corporate development and strategy at LifeLock, the identity theft prevention company. Last year he led its $43 million acquisition of Lemon, a mobile wallet startup.
That deal didn’t turn out quite as well as hoped. In May LifeLock disclosed that the payment data Lemon had gathered didn’t conform to a payment industry security standards known as PCI. It ended up deleting the data on about 4 million users and pulled its Lifelock Wallet mobile app from the Apple and Google app stores. The news hurt Lifelock shares fell by about 17 percent after the news was released but they have since recovered.
Prior to Lifelock Iltchev spent nearly four years as a development executive a Salesforce.com during a period when it made some of its most notable acquisitions. Among them were cloud software development platform Heroku, social media tracking company Radian6, and the cloud marketing software firms Buddy Media and ExactTarget.
While at Salesforce, Iltchev led the cloud software giant’s investment in Box. In 2011 Salesforce joined SAP Ventures in an $81 million strategic investment.
Before Salesforce, he worked in the M&A office computing giant Hewlett-Packard around the time it closed its $14 billion deal for the IT services firm EDS.
Box is expected to complete its IPO in the fall. It last updated its S1 filings with the U.S. Securities and Exchange Commission on July 7, the same day it took a $150 million investment round led by the private equity firms TPG and Coatue Management.
The latest filings show that Box continued to lose money in the quarter that ended April 30. It recorded a $38.5 million loss on revenue of $45.3 million versus a $34 million loss on $23.4 million in sales in the same quarter of 2013. It’s also still burning cash at a rate that would seem alarming at any other company, averaging about $19.7 million a month. It also had 39,000 paying corporate customers, including the industrial giant GE, and 27 million individual users.
More interesting from an M&A perspective is the $79.3 million in cash on Box’s balance sheet. That figure was reported before it took the $150 million round from TPG and Coatue. Assuming it raises the $250 million it wants from its eventual IPO, Box could go on something of an acquisition binge in the coming months.
That would fit into Levie’s wider strategy to push Box’s technology as the backbone for cloud software development aimed at vertical industries such as health care, insurance and manufacturing. He outlined the strategy in an interview with Re/code earlier this year.
Box had hoped to complete its IPO by July or August but its plans were dealt a setback earlier this year when the share prices of several publicly traded cloud software companies suddenly declined in March. As shares of those companies — Salesforce, Workday, ServiceNow and LinkedIn among them — began to recover, its IPO plans revived.
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