CloudFlare Lands $50M Round

CloudFlare, based in San Francisco CA, started in 2009 and has 70 employees. They raised $50M in Series C exactly one year ago. That brings the total raised to $72M. For an up-and-coming CDN, that’s a lot of cash. They can hire a ton of staff, expand the network footprint, and buy lots of new servers.

The mystery is why didn’t CloudFlare announce the big news a year ago. According to the CEO, it has something to do with going in the opposite direction of what the Valley is doing. They didn’t want to announce the funding round like everyone else would. Instead, they wanted to show and tell – show growth first and then tell the public.

Personally, I don’t think it was the right choice. Surviving in the competitive CDN space is all about momentum. CDNs need to leverage everything at their disposal to make a splash in the marketplace. If you raise $5M, announce it. If you raise $50M, put it in the front page of the Wall Street Journal.

Follow the strategies of other successful CDNs like Cotendo, EdgeCast, Fastly and Yottaa. Why go off in a tangent. More than anything else, announcing news like this early, raises your status amongst the competition. They’ll see you as a more viable competitor and respect you more.

Remember, the competition is watching your every move. Anything that keeps them in check is good. Lastly, CloudFlare has lost potential customers that dismissed CloudFlare over the last 12 months because they considered them too small. These prospects might have reached out and signed a big deal with CloudFlare if they read the news earlier.