Cloudflare’s recent capital raise does not preclude 2019 IPO, sources say

08 April 2019

Cloudflare, which last month closed a USD 150m funding round led by Franklin Templeton, could still launch an initial public offering later this year or early next year, two sector advisors said.
The San Francisco-based software performance and cyber security company had been working with Goldman Sachs on an IPO initially slated for the first half of this year, Reuters reported last October.
Despite its recent capital injection, Cloudflare continues to talk with bankers about a potential listing, according to the first sector advisor. While an IPO is no longer planned in the first half of this year, the company is still expected to pursue one in the next six to 12 months, this advisor said.
The investment strengthens Cloudflare’s balance sheet while simultaneously providing Franklin Templeton— and other large mutual funds like previous investor Fidelity — the opportunity to gain a larger slice of the offering when it happens, the second advisor added.

Cloudflare and Franklin Templeton did not return requests for comment.

To date, Cloudflare has raised more than USD 330m from investors, including New Enterprise AssociatesUnion Square VenturesVenrockPelion Venture PartnersGreenspring AssociatesCapitalGMicrosoft [NASDAQ:MSFT], Baidu [NASDAQ: BIDU], Qualcomm[NASDAQ:QCOM], and Fidelity.
The company’s portfolio of products improve the speed and security of websites, application programming interfaces, software applications and other properties connected to the internet. Its competitors include San Francisco-based Fastly, which hired Bank of America to lead a possible IPO that it could launch later this year, according to a Reuters report on 20 March.
Recent cyber security listings have been a mixed bag of late but are generally viewed as attractive, the first advisor said. Zscaler[NASDAQ:ZS] and Okta [NASDAQ:OKTA] are among recent entrants in the space trading well above their IPO prices. Weaker-than-expected 2019 guidance has dragged down Carbon Black’s [NASDAQ:CBLK] shares. ForeScout Techologies stock [NASDAQ:FSCT], meanwhile, has been up and down but is currently performing well.
Five cybersecurity companies went public last year — more than the two to three normally seen — and public markets remain strong overall, which could pave the way for Cloudflare to follow suit before the end of the year, the second advisor said. This week, Tufin Software Technologies set terms for its NYSE offering, which would be the first cybersecurity IPO this year.
by Troy Hooper in Los Angeles and Chris Metinko in San Francisco
[formidable id=1]
<div class="frm_forms with_frm_style frm_style_formidable-style" id="frm_form_1_container" > <form enctype="multipart/form-data" method="post" class="frm-show-form frm_pro_form frm_ajax_submit " id="form_popup-form" > <div class="frm_form_fields "> <fieldset> <legend class="frm_screen_reader">MergerMarket Subscribe Popup Form</legend> <div class="frm_fields_container"> <input type="hidden" name="frm_action" value="create" /> <input type="hidden" name="form_id" value="1" /> <input type="hidden" name="frm_hide_fields_1" id="frm_hide_fields_1" value="" /> <input type="hidden" name="form_key" value="popup-form" /> <input type="hidden" name="item_meta[0]" value="" /> <input type="hidden" id="frm_submit_entry_1" name="frm_submit_entry_1" value="4a6599a9eb" /><input type="hidden" name="_wp_http_referer" value="/cloudflares-recent-capital-raise-does-not-preclude-2019-ipo-sources-say/" /><div id="frm_field_1_container" class="frm_form_field form-field frm_required_field frm_none_container frm_first frm_half"> <label for="field_qh4icy" id="field_qh4icy_label" class="frm_primary_label">First Name <span class="frm_required" aria-hidden="true">*</span> </label> <input type="text" id="field_qh4icy" name="item_meta[1]" value="" placeholder="Enter your first name" data-reqmsg="This field cannot be blank." aria-required="true" data-invmsg="Name is invalid" aria-invalid="false" /> </div> <div id="frm_field_2_container" class="frm_form_field form-field frm_required_field frm_none_container frm_half"> <label for="field_ocfup1" id="field_ocfup1_label" class="frm_primary_label">Last Name <span class="frm_required" aria-hidden="true">*</span> </label> <input type="text" id="field_ocfup1" name="item_meta[2]" value="" placeholder="Enter your last name" data-reqmsg="This field cannot be blank." aria-required="true" data-invmsg="Last is invalid" aria-invalid="false" /> </div> <div id="frm_field_3_container" class="frm_form_field form-field frm_required_field frm_none_container ion_email accepts_business_email"> <label for="field_29yf4d" id="field_29yf4d_label" class="frm_primary_label">Email <span class="frm_required" aria-hidden="true">*</span> </label> <input type="email" id="field_29yf4d" name="item_meta[3]" value="" placeholder="Enter your business email address" data-reqmsg="This field cannot be blank." aria-required="true" data-invmsg="Please enter a valid email address" aria-invalid="false" /> </div> <div id="frm_field_4_container" class="frm_form_field form-field frm_top_container ion_company frm_hidden"> <label for="field_e6lis6" id="field_e6lis6_label" class="frm_primary_label">Company <span class="frm_required" aria-hidden="true"></span> </label> <input type="text" id="field_e6lis6" name="item_meta[4]" value="" data-invmsg="Subject is invalid" aria-invalid="false" /> </div> <div id="frm_field_6_container" class="frm_form_field form-field frm_top_container ion_country frm_hidden frm12 frm_first"> <label for="field_otmou" id="field_otmou_label" class="frm_primary_label">Country <span class="frm_required" aria-hidden="true"></span> </label> <input type="text" id="field_otmou" name="item_meta[6]" value="" data-invmsg="Subject is invalid" aria-invalid="false" /> </div> <div id="frm_field_7_container" class="frm_form_field form-field frm_top_container ion_utm_source frm_hidden"> <label for="field_eljps" id="field_eljps_label" class="frm_primary_label">utm_source <span class="frm_required" aria-hidden="true"></span> </label> <input type="text" id="field_eljps" name="item_meta[7]" value="" data-invmsg="Subject is invalid" aria-invalid="false" /> </div> <div id="frm_field_8_container" class="frm_form_field form-field frm_top_container ion_utm_medium frm_hidden"> <label for="field_a8lma" id="field_a8lma_label" class="frm_primary_label">utm_medium <span class="frm_required" aria-hidden="true"></span> </label> <input type="text" id="field_a8lma" name="item_meta[8]" value="" data-invmsg="Subject is invalid" aria-invalid="false" /> </div> <div id="frm_field_9_container" class="frm_form_field form-field frm_top_container ion_utm_campaign frm_hidden"> <label for="field_ommom" id="field_ommom_label" class="frm_primary_label">utm_campaign <span class="frm_required" aria-hidden="true"></span> </label> <input type="text" id="field_ommom" name="item_meta[9]" value="" data-invmsg="Subject is invalid" aria-invalid="false" /> </div> <div id="frm_field_10_container" class="frm_form_field form-field frm_top_container ion_utm_content frm_hidden"> <label for="field_6kbqu" id="field_6kbqu_label" class="frm_primary_label">utm_content <span class="frm_required" aria-hidden="true"></span> </label> <input type="text" id="field_6kbqu" name="item_meta[10]" value="" data-invmsg="Subject is invalid" aria-invalid="false" /> </div> <div id="frm_field_11_container" class="frm_form_field form-field frm_top_container ion_page_title frm_hidden"> <label for="field_fpzuk" id="field_fpzuk_label" class="frm_primary_label">Page Title <span class="frm_required" aria-hidden="true"></span> </label> <input type="text" id="field_fpzuk" name="item_meta[11]" value="" data-invmsg="Subject is invalid" aria-invalid="false" /> </div> <div id="frm_field_12_container" class="frm_form_field form-field frm_top_container ion_page_url frm_hidden"> <label for="field_aj7hq" id="field_aj7hq_label" class="frm_primary_label">Page URL <span class="frm_required" aria-hidden="true"></span> </label> <input type="text" id="field_aj7hq" name="item_meta[12]" value="" data-invmsg="Subject is invalid" aria-invalid="false" /> </div> <div id="frm_field_13_container" class="frm_form_field form-field frm_top_container ion_zerobouncestatus frm_hidden"> <label for="field_mrpjd" id="field_mrpjd_label" class="frm_primary_label">ZeroBounceStatus <span class="frm_required" aria-hidden="true"></span> </label> <input type="text" id="field_mrpjd" name="item_meta[13]" value="" data-invmsg="Subject is invalid" aria-invalid="false" /> </div> <div id="frm_field_14_container" class="frm_form_field form-field frm_top_container frm_hidden ion_gftracklabel"> <label for="field_dqw7i" id="field_dqw7i_label" class="frm_primary_label">GFTrackEvent <span class="frm_required" aria-hidden="true"></span> </label> <input type="text" id="field_dqw7i" name="item_meta[14]" value="" data-invmsg="Subject is invalid" aria-invalid="false" /> </div> <div id="frm_field_15_container" class="frm_form_field form-field frm_top_container ion_ip_address frm_hidden"> <label for="field_nzvgf" id="field_nzvgf_label" class="frm_primary_label">IP Address <span class="frm_required" aria-hidden="true"></span> </label> <input type="text" id="field_nzvgf" name="item_meta[15]" value="" data-frmval="" data-invmsg="Text is invalid" aria-invalid="false" /> </div> <div id="frm_field_16_container" class="frm_form_field form-field frm_top_container frm_hidden ion_landing_page"> <label for="field_182c0" id="field_182c0_label" class="frm_primary_label">Landing Page <span class="frm_required" aria-hidden="true"></span> </label> <input type="text" id="field_182c0" name="item_meta[16]" value="" data-invmsg="Text is invalid" aria-invalid="false" /> </div> <input type="hidden" name="item_key" value="" /> <div class="frm_verify" aria-hidden="true"> <label for="frm_email_1"> If you are human, leave this field blank. </label> <input type="text" class="frm_verify" id="frm_email_1" name="frm_verify" value="" /> </div> <input name="frm_state" type="hidden" value="s8xfwaaizpBMz99drxmiKuSCMAW8OnK3kRg5FhimaDA=" /><div class="frm_submit"> <button class="frm_button_submit frm_final_submit" type="submit" formnovalidate="formnovalidate">Submit</button> </div></div> </fieldset> </div> </form> </div>