Just this morning, CloudFlare announced a $110 million round led by Fidelity Investments, and on stage today at TechCrunch Disrupt, Michelle Zatlyn, CloudFlare’s head of customer experience, told TechCrunch’s Frederic Lardinois the company definitely won’t be IPOing this year — but she hinted that it’s out there on the horizon.
When a big round is led by a public market investor like Fidelity, it’s like firing off a flare that the IPO moment is coming, but like most companies, CloudFlare wouldn’t commit to an exact trigger moment.
CEO Matthew Prince would only say that it was something they are working towards. “We think we are on the track to be independent stand-alone public company,” he said.
Interestingly, CloudFlare launched five years ago as a Disrupt Battlefield participant. It came close to winning, but didn’t quite make it. Just today, backstage at Disrupt, I overheard TechCrunch founder Michael Arrington and Prince tell that Battlefield story. Arrington at the time, compared the winner to a shiny Ferrari and CloudFlare as “boring muffler stuff.”
Today, in honor of that moment, Prince presented Arrington with a golden muffler on stage — and Prince and Zatlyn talked about company’s more recent happenings.
The investment went live this morning because Prince said the company wanted to announce it in association with the Disrupt appearance, as an homage of sorts to that moment five years ago. Prince said, that raising money wasn’t necessarily something startups should be proud of likening to a family getting a mortgage. It’s something you need to do to, he said.
That said, the company still needs revenue to bridge the gap between private funding and going public, whenever that should happen. “We are building something big and transforming into something that works. And that does take capital,” Zatlyn said. In fact, they are doubling in size every year.
The company also recently made a significant deal in China with Baidu, which was also one of the investors in today’s funding announcement. The Chinese deal has been in the works for almost as long as the company has been around, Prince explained.
The company was able to deal with Chinese firewall issues by leaving all of the activity on Baidu’s servers and having no direct operations inside the country. As Prince pointed out, Chinese companies don’t necessarily want to pass through US-based servers and US companies sometimes feel the same way about China.
By partnering with Baidu, CloudFlare was able to satisfy both parties.
As for the enterprise (which is near and dear to my heart), CloudFlare gets 50 percent of its business from larger customers. Prince said many of those are driven by people inside the company who started by using the free product, then introducing it inside their organizations.