This 26-Year Old Founder Is Raising $100 Million To Take On Giants Like Microsoft
Aaron Levie is unusual for a 26-year-old CEO — he's much more excited about business software than consumer products like Foursquare. — Levie founded Box.net, an online service for sharing and collaborating on documents and other files, in 2005.
Context & Ripple Effects
Aaron Levie started Box.net in 2005 as a document sharing and collaboration service, and at 26 he is now raising $100 million with the stated aim of going after enterprise software giants like Microsoft. In a funding climate fixated on consumer products such as Foursquare, Levie's pitch stands out for being deliberately unglamorous: sell collaboration software to businesses rather than chase consumer social apps.
First-order effects
- Box.net gains a $100 million war chest to fund enterprise sales and product development aimed directly at Microsoft's collaboration franchise.
- Levie's enterprise-first positioning sharpens Box.net's identity against the consumer-app startups dominating venture attention in 2011.
Second-order effects
- Microsoft faces a young, well-capitalized challenger marketing cloud-native file sharing as a lighter alternative to its incumbent tooling, forcing a defensive response on pricing and packaging.
- Other cloud storage and collaboration vendors come under pressure to raise comparable growth capital or cede the enterprise segment to whoever can outspend on sales.
Third-order effects
- If nine-figure rounds keep flowing to enterprise software startups, capital concentrates in a handful of companies capable of buying market share from incumbents — reshaping how business software is funded and sold.
- A generation of founders choosing enterprise markets over consumer ones would shift where venture dollars and talent pool in the software industry.
The trend: Enterprise software is shifting from licensed incumbents like Microsoft toward venture-funded cloud collaboration startups, with mega-rounds financing the land grab.