Ray Rothrock

CloudFlare is Shining Bright

In Technology on July 12, 2011 at 7:32 am

Today CloudFlare announced a $20 million equity financing lead by NEA and joined by Venrock and Pelion. For a 15-person company, raising $20 million is a lot of money.  So what’s up?

CloudFlare provides security and web performance for any company with a website.  The company initially targeted the Long Tail, which typically includes small companies that do not have the skills, capital or technology to deal with the ever-increasing security threats that come from everywhere.  Big companies often have the resources to fight the fight, small companies do not.  So, CloudFlare provides security for everyone… for free.  Maybe the most amazing feature is that every attack thwarted by CloudFlare actually makes the service stronger for everyone, to the benefit of all website owners and their visitors.

CloudFlare introduced itself to the world at Tech Crunch last September 2010.  As of this past weekend, CloudFlare has had tens of thousands of customer signups for the service and is serving billions of pages a month presently at a rate of about  seven billion and growing.  This equates 10% of the web page traffic on the Internet.  Let me say again –10%!  This is staggering growth.  Further, these websites are not only more secure, they are also faster.

The engineers at CloudFlare are busy coming up with new ways to improve customer’s websites.  One idea was to improve the code served to anyone’s browser. Another idea was to provide an Apps environment for your website.  There are so many things every website owner wants and serves in addition to security and performance.  It’s as if there is new “real estate” out there on which to build.

Internet security has always been important.  But now, with frequent front page news often above the crease, security is important to anyone operating on the Internet with just about any kind of website.  Everyone knows this is an issue.

CloudFlare represents our 15th security sector investment and I have sat on the Board since our investment in the company’s first round. In my investment experience over the past 23 years, the world-class companies I’ve help build and those I’ve watch built have a few things in common.  They build excellent product, provide low friction to adoption and acceptance by customers, and make their customers very happy.  Market leaders get many rewards, not the least of which is final valuations 3 to 5x the #2 player in a market.  CloudFlare has all the attributes of leadership in this exploding market as early as it is.  CloudFlare has strong creative management, has established thought leadership, is garnering market share at a prodigious rate, and most importantly, is growing a team that wants to win, that is committed to win, and will.  Adoption by customers is amazingly simple.  And the customers love it.  Without any marketing, the impact of word of mouth has generated all the sign ups the company enjoys.  You don’t get that kind of multiplier if the customers are not happy.

As the name implies, let the light shine from behind the cloud and make everyone’s website safer, faster and better.

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