Online data storage provider Box's shares surge in debut

- Online data storage provider Box Inc's shares rose as much as 77 percent in their debut on Friday as investors shrugged off concerns about the company's ability to turn profitable in a highly competitive market.

Box's shares opened at $20.20 and hit a high of $24.72 in early trading on Friday on the New York Stock Exchange, valuing the company at nearly $3 billion.

The company raised $175 million after its initial public offering of 12.5 million Class A common shares was priced at $14.00 each, above the expected range.

Box's listing was one of the most-awaited technology IPOs after Chinese e-commerce giant Alibaba Group Holding Ltd's blockbuster debut in September.

The company filed to float its shares in March but postponed, citing volatile markets.

The U.S. IPO market has been on a tear since 2013. New issues raised more than $93 billion last year, the most since 2000.

Box was founded in 2005 by University of Southern California drop-out Aaron Levie, who heads the company, and his friend Dylan Smith, who is the chief operating officer.

Box has about 32 million users. In comparison, its more popular privately-held rival, Dropbox, claims it had 300 million users as of May. Dropbox is valued at about $10 billion. (bit.ly/1tsaMLK)

A growing concern for Box is rising competition from bigger players offering similar services at cheaper rates.

Box's other rivals include Microsoft Corp's OneDrive, which is offered free when users sign up for its Office apps, Apple Inc's iCloud and Google Inc's Google Drive.

Box offers 10 gigabytes of free online storage and charges fees for additional space.

To circumvent the strong competition in the industry, the company has also started offering specialized storage options such as digital versions of X-rays for drugmakers.

The market for file storage and sharing is expected to grow by about 23 percent to $2.3 billion over the next five years, with online storage growing at a faster pace of 27 percent, according to research firm IDC.

Box's revenue rose 80 percent to $153.8 million in the nine months ended Oct. 31, while net loss narrowed to $121.5 million from $125.2 million, a year earlier.

Venture capital firm Draper Fisher Jurvetson's stake in the company fell to 19.2 percent after the offering. Levie owns 3.4 percent and Smith 1.5 percent of the company.

Morgan Stanley, Credit Suisse and JP Morgan were the lead underwriters for the offering.