cloudflare

Cloudflare reaches $1B run rate, promises $5B in 5 years. Investors? Not impressed • ZebethMedia

By zebethcontrolPosted on November 6, 2022Posted in cloudflare, earnings, EC Cloud and Enterprise Infrastructure, EnterpriseNo Comments

Cloudflare, the internet infrastructure and security company, reported earnings on Thursday, reaching a significant milestone. With almost $254 million in revenue, the company is on a run rate of over $1 billion for the first time. Revenue, which was up 47% over the previous year, also beat the street’s estimate of $250.6 million. That win was offset by a third-quarter loss of $42.5 million, or 13 cents a share. Still, Cloudflare posted a much smaller loss than in the year-ago quarter when it reported losses of $107.3 million, or 34 cents a share, per MarketWatch. After earnings, Cloudflare co-founder and CEO Matthew Prince announced that the company set a lofty goal to reach $5 billion in revenue organically within five years. “Even as we achieve $1 billion, we have penetrated less than 1% of our identified market for products we already have available today.” “That’s why we’re confident we’re on the path to organically achieve $5 billion in annualized revenue over the next five years,” Prince told analysts in the earnings call. Prince also pointed out how rare it is for a company to reach $1 billion in revenue. “Only 6% of public software companies achieved this milestone, so we’re proud to have crossed it, but nowhere close to finished,” Prince said. Per usual, the markets treated this news with a kick in the teeth, with the company’s stock down as much as 13% overnight Thursday and down over 18.5% by the close on Friday. But how realistic is the $5 billion goal, given its current situation and predicted revenue for 2023?

Could corporates be good matchmakers for startups and VCs?

By zebethcontrolPosted on October 9, 2022Posted in cloudflare, EC News Analysis, EC venture capital, Enterprise, StartupsNo Comments

Cloudflare last week announced a $1.25 billion funding program for startups that build on its software, Cloudflare Workers. But this isn’t a corporate venture fund and that sum is not company money. Rather, it’s an initiative in which the cloud infrastructure company curates a group of its startup customers and presents them to venture capitalists, each of which committed $50 million to back companies building on Cloudflare Workers. The list of 26 venture funds includes big players like NEA and Boldstart and smaller firms like Pear VC. Cloudflare CEO Matthew Prince told me that number has continued to grow since the project was announced in September. The reason this is interesting is that while public companies have been drastically increasing their presence in startup funding in recent years, it’s largely been through one of two playbooks: Companies were either setting aside a sleeve of capital on their balance sheet to back startups in adjacent or complementary sectors to their own, or they were launching an accelerator program. This strategy from Cloudflare feels fresh. And if successful, it could prove to be a pretty smart bet. The program essentially helps funnel money to its customers, thus securing their need for the platform, while also attracting startups to consider building on Cloudflare over other platforms — without Cloudflare having to spend anything. It’s worth noting companies entering this program, regardless of whether they get pitched to VCs, do get multiple software features for a year for free. But will a corporation like Cloudflare be a good matchmaker? Prince seems to think so — he told me that the idea for the program came from the company’s conversations with venture capitalists.