Cloudflare IPO: Building a better internet

Featured under VC-backed IPOs in our 2019 Fall IPO Preview: Cloudflare (NET) is scheduled to go public later this week. This global cloud platform helps 75,000 paying customers and two million free users improve the security, performance, and reliability of their websites, APIs and apps. With its self-serve model and low pricing, Cloudflare has achieved widespread adoption, and increased traction among enterprise customers (now over 50% of revenue) like SAP, Thomson Reuters, Walmart, and the FBI helped the company accelerate revenue growth from 43% in 2018 to 48% in the 1H19. With near-80% gross margins, the company believes it can become highly profitable in the long-term.

Cloudflare (NET) updated their terms this week, now they plan to raise $455 million at a market cap of $4.1 billion. Backed by NEA, the company last raised funding at $11, below the upwardly revised range of $12-14. Cloudflare’s web optimization and security platform enhances over 20 million internet properties, growing fast with high gross margins. Competition, losses, and a shift to enterprise customers all pose potential risks, though software IPOs this year have averaged a strong 51% pop on the first day. 

Bookrunners: Goldman Sachs, Morgan Stanley, J.P. Morgan, and three others.

Read about other hot VC-backed deals to watch out for in our 2019 Fall IPO Preview.