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Why we raised $110m from Fidelity, Google, Microsoft, Baidu and Qualcomm

by Joshua Motta.

The past few years have been marked by tremendous growth for CloudFlare. At the time of our last fundraising in December 2012, CloudFlare was a team of 37 operating a network in 23 cities and 15 countries—today we number over 200 with a presence in 62 cities and 33 countries. We’ve grown from delivering 85 billion page views per month for 500 thousand customers to nearly 1 trillion each month across 4 million Internet properties, all the while protecting our customers from hundreds of billions of cyber threats. The growth and resonance of our service since CloudFlare’s founding 5 years ago is beyond our wildest of expectations, but it is only in the coming years that our scale and efforts to build a better Internet will become visible.

In 2016 alone we will more than double our global presence, increase the size of our network by an order of magnitude, and with that allow millions of new businesses and online publishers to accelerate and secure their online applications and harness the growing power of the Internet economy. Our service is built on the simple premise that any individual or business should be able to quickly and easily ensure the global performance and availability of their websites and mobile apps, and withstand withering and sophisticated cyber attacks—all without a single piece of hardware, or the need to build a global network and the team of engineers to manage it all.

To sustain this level of growth requires investment. In this pursuit we’re pleased to announce that we have raised $110 million from Fidelity, Google, Microsoft, Baidu, Qualcomm and our existing investors. Beyond the additional capital raised, the broad, strategic participation in the round from many of the world’s leading technology firms validates the opportunity ahead of us, and positions us for the next chapter of our growth.

But before we write this new chapter, a bit about how we got here.

A seismic shift is underway

Seismic shifts are the sorts of groundbreaking developments that fundamentally alter the ways in which organizations and industries operate. We came upon a few such shifts as CloudFlare was founded in 2009. Although these shifts were already well underway, their strength has increased logarithmically each year.

These shifts are the massive movement of commerce and communication online, and the rapidly evolving means by which organizations deploy applications, increasingly in the cloud. Had one started a business in 2009, their first call might very well have been to Dell or HP to purchase servers (ours was to HP!), followed by calls to Oracle and Microsoft for the databases and software necessary to deliver the applications across the final tier of Internet hierarchy, the network edge. It is in this last tier that companies like Cisco capitalized on the last seismic shift at the network edge—the need to process and manage an explosion of network traffic directed towards the applications, and storage and compute platforms beneath.

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Excerpt from our fundraising presentation titled "Scalability and elasticity of the cloud will prevail"

Today it is almost inconceivable that an upstart business would purchase a single piece of hardware, much less call anyone to procure it. In less time, with less cost, and more elasticity, an organization can turn up any number of storage and compute instances on cloud based platforms. The on-premise, perpetual license-based software and databases of yesteryear are now also available as services. Even complex applications such as customer relationship management (CRM) and enterprise resource management (ERP) systems are now largely dominated by software as a service (SaaS) offerings. CloudFlare is now pioneering this same shift at the network edge. In other words, it’s time to say farewell to hardware appliances.

The network edge can be broadly described as the “control plane” for all traffic directed to the layers below. This control plane ensures that traffic to the layers below consistently reaches its destination, that authorized users receive appropriate access, and that hackers are kept at bay. Each of these appliances (e.g., firewalls, load balancers, DDoS mitigation appliances, WAN optimizers, malware scanners, authentication devices, among many others) look for patterns in traffic, apply stored rules against the patterns, and make network I/O decisions to block, re-route, and compress, among many other functions. Now, CloudFlare is able to perform each of these functions without a single piece of customer hardware, and across a global network with immensely greater scale and elasticity, and a small fraction of the latency and cost.

![](/content/images/2015/09/NetworkEdge.png)

Excerpt from our fundraising presentation titled "The network edge now expands beyond the data center"

This shift at the network edge is further driven by its expansion, as well as the blurring of its perimeter (security jargon for the line delineating assets to be protected). This expansion is occurring across multiple vectors. Organizations now deploy their applications across multiple geographies to reduce latency, across disparate physical and cloud environments for redundancy and elasticity, and adopt third party SaaS applications to replace internal business systems. What used to be solved by hardware appliances is now far better solved by cloud services.

CloudFlare is the new control plane for the network edge. With a simple DNS change, traffic to an organization’s applications and store and compute environment are directed through CloudFlare’s global network no matter where they reside geographically, logically or virtually. With one of the largest edge networks globally, we can perform each of the aforementioned edge functions to accelerate, secure and ensure the availability of the applications behind us with blazing fast speed, absolute elasticity and an enormous return on investment compared to hardware based solutions.

This is our vision, and one that is now shared with many of the world’s leading technology firms (and investors). Each of Fidelity, Microsoft, Baidu, Qualcomm and Google are uniquely positioned to support CloudFlare’s evolution in a rapidly evolving environment, and address key questions. What is our mobile strategy? What is our China strategy? How are we going to succeed with large enterprises? Will other giants partner or compete with you? How does CloudFlare become a public company?

Our choice of investors should hopefully provide some insight into our answers to each of these questions. Moreover, each of the participants in our round agreed to invest in the company without any special control provisions, board representation, economic treatment or even information rights. It was important for us as a company to continue to execute against our vision without distraction.

Where to from here?

We don’t precisely know, but if the past is any indicator, it may continue to be beyond our expectations. In a fun bit of CloudFlare history, we unearthed an e-mail between two of CloudFlare’s founders from May 2009.

What might have sounded delusional to many five years ago (and they probably would have been right at the time), is a reality today. Five years later, and built upon the contributions of a talented team, our steadfast customers, and an unparalleled group of investors, we are well on the path to building something big and unique.

We’re always looking for feedback. You asked for an intuitive, easy-to-use interface, and we delivered. Encryption and SSL certificates? Now free, and included with all plans. A larger network to serve your global visitor base? We’re 62 deep, and not stopping. This feedback has helped tremendously over the past 5 years, so please keep it coming as we tackle the next five.

We’re looking for new team members. Great people who are passionate about building a better Internet, and willing to tackle big problems. We are building a service that allows anyone to run a website or mobile app as fast and secure as the Internet giants, improving the surfing experience for over 2 billion Internet users, and empowering millions of businesses to securely transact online each day. If that sounds interesting, check out our job postings here.

Thanks for your support over the past five years.

—The CloudFlare team

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