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Box opens the lid to new tools and cash to court developers

April 22, 2015, 10:19 PM UTC
Box's Aaron Levie Talks With FORTUNE's Jessi Hempel - 2014 SXSW Music, Film + Interactive Festival
speaks onstage at Box's Aaron Levie Talks With FORTUNE's Jessi Hempel during the 2014 SXSW Music, Film + Interactive Festival at Austin Convention Center on March 10, 2014 in Austin, Texas.
Photograph by Richard Mcblane — Getty Images for SXSW

In its first corporate event since an initial public offering earlier this year, Box focused on making outside developers happy by introducing new tools for them and potential cash for those that use its services.

Speaking at the San Francisco-based conference on Wednesday, Box co-founder and CEO Aaron Levie announced a $40 million pot of money available to startups using Box to build their products. Box investors Bessemer Venture Partners and Emergence capital are each contributing $20 million to the fund while Box will lend technical and strategic support.

Box, which started as an online file-storage service for companies, has made very clear it sees developers as key to its success. After its founding 10 years ago, it soon made tools available to outside developers who wanted to integrate Box into their own products.

The strategy has worked in terms of attracting more than 3.5 million users. But despite the big numbers, the company has yet to turn a profit and only has 45,000 paying customers.

Third-party developers could help turn its financial tide, Box seems to believe. So why not offer a potential investment incentive if it could coax entrepreneurs into using Box’s tools?

The newly announced fund could also be great for Bessemer and Emergence. The amount they’ve committed is not much by venture capital standards and the upside could be great if the next startup unicorn – those with valuations greater than $1 billion – comes through the program. As Bessemer partner Byron Deeter told the media after the announcement, Box’s tools are the best in their categories, so why not give funding to startups using them well? Of course, Box’s rival, Dropbox, would dispute that assertion.

But for any company to build a successful product, it’ll need the latest developer tools, and Box executives unveiled a handful of new ones during Wednesday’s keynote.

Most notably, Box (BOX) introduced its Box Developer Edition tool, essentially a white-labeled version of Box that developers can use to power their applications while retaining control of the data, users, and user interface. With this tool, a developer could use Box behind the scenes to store the files and data its own users need, yet the developer gets to control the user signup and login process.

In a demonstration, senior director of platform engineering Heidi Williams showed off an example application for a healthcare company dubbed “BlueCare.” As a fellow Box engineer created a user account onstage, Williams pointed out how the entire process was controlled and designed by BlueCare instead of prompting him to make or use a Box account.

“This is not a Box experience, it’s a BlueCare experience,” she said. “He’s actually creating a Box user account behind the scene,” although it’s never apparent.

But the biggest question about the Box Developer Edition will be whether outside companies will trust Box’s tools and its security enough to give it their data

Box also unveiled new tools for mobile app developers and for making and viewing of documents.

Ryan Damico, founder of Crocodoc, a startup that built technology for the viewing of documents in the browser and which Box acquired in 2013, showed off a new watermarking feature. To make his point, Damico pointed out that recently leaked episodes of the popular television series Game of Thrones, came from advance copies that would normally sport large watermarks to prevent anonymous leaks — these clearly didn’t.

Box’s recent acquisitions of MedXT and Verold will power the newly available capabilities of loading and viewing medical and 3D images respectively, Damico said. Over the last year, Box has made it clear that it plans to push into industries like healthcare and education by providing them with products tailored to their needs, making the expansion of the types of files it supports — like medical images — far from a surprise.

Overall, Box is continuing to make it clear that it needs developers if it wants to succeed. It has 50,000 of them now, but will new tools be enough to attract more?

For more about Box, watch this Fortune video: