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Web Security Company CloudFlare Files to Go Public, Listing Some Interesting Risk Factors: Term Sheet

Another day, another unicorn files to go public. 

This time, it’s CloudFlare, the San Francisco-based web performance and security company. The company did not disclose the number of shares that would be offered and set a placeholder target of raising $100 million.

CloudFlare has raised more than $332 million in total venture capital funding since its inception. Its largest outside backers include Fidelity, Venrock, NEA, and Pelion Ventures. The company was last valued at $3.2 billion in the private markets.

In the first half of 2019, Cloudflare had a $36.8 million net loss on $129.2 million in revenue, according to its S-1 filing. That revenue figure was up 48% from the first half of 2018, and the loss was up 13%.

Earlier this month, CloudFlare received negative publicity in connection with the use of its services by 8chan, a forum website that served as inspiration for the recent attacks in El Paso, Texas and Christchurch, New Zealand. Even though CloudFlare severed its ties to 8chan last week, it went on to list it as a risk factor in its prospectus. 

Activities of such groups have had “significant adverse political, business, and reputational consequences” for the company, Cloudflare said in the filing. Terminating those accounts, though, has raised censorship concerns, it said.

“We received significant adverse feedback for these decisions from those concerned about our ability to pass judgment on our customers and the users of our platform, or to censor them by limiting their access to our products, and we are aware of potential customers who decided not to subscribe to our products because of this,” the filing reads.

My colleague Verne Kopytoff reports:

Cloudflare co-founder and Chief Executive Officer Matthew Prince has publicly struggled with decisions balancing freedom of speech on the internet with the need to limit hateful, racist online posts and potentially dangerous calls for violence.

After deciding to cut services to The Daily Stormer, Prince said the move could set a dangerous precedent. 

“After today, make no mistake, it will be a little bit harder for us to argue against a government somewhere pressuring us into taking down a site they don’t like,” Prince wrote. 

Read more at Fortune.

WEEKEND READING: Here are some great long-reads for the weekend: 

— Three Years of Misery Inside Google, the Happiest Company In Tech:  Google has found itself in the same position over and over again: a nearly $800 billion planetary force seemingly powerless against groups of employees—on the left and the right alike—who could hold the company hostage to its own public image. 

— The Rise of the Virtual Restaurant: Food delivery apps are reshaping the restaurant industry — and how we eat — by inspiring digital-only establishments that don’t need a dining room or waiters.

— The World’s Wealthiest Family Gets $4 Million Richer Every Hour: The numbers are mind-boggling: $70,000 per minute, $4 million per hour, $100 million per day. That’s how quickly the fortune of the Waltons, the clan behind Walmart, has been growing. At that rate, their wealth would’ve expanded about $23,000 since you began reading this.


ShareChat, an India-based social media network, raised $100 million in Series D funding. Twitter led the round, and was joined by investors including TrustBridge Partners and earlier backers Shunwei Capital, Lightspeed Venture Partners, SAIF Capital, India Quotient and Morningside Venture Capital

Nurx, a San Francisco-based health tech company providing on-demand birth control delivery, raised $52 million in Series C funding. Kleiner Perkins Digital Growth Fund and Union Square Ventures co-led the round, and were joined by investors including participation from Reproductive Health Investors Alliance, Dreamers VC, Lowercase Capital, Y Combinator, and Triple Point Capital.

Vuori, an Encinitas, Calif.-based activewear company, raised $45 million in funding from Norwest Venture Partners.

Zenlayer, a Los Angeles-based edge cloud services provider, raised $30 million in Series B funding. Forebright Capital led the round.

Incorta, a San Mateo, Calif.-based no-ETL data warehouse, raised $30 million in Series C funding. Sorenson Capital led the round, and was joined by investors including GV, Kleiner Perkins, M12 and Telstra Ventures.

Two Chairs, a San Francisco-based mental healthcare company, raised $21 million in Series B funding. Amplo led the round, and was joined by investors including Goldcrest and Maveron.

Mux, a San Francisco-based cloud video infrastructure company, raised $20 million in Series B funding. Investors include Evolution Media, Accel and Y Combinator.

Sorted Group, a delivery software business, raised £15 million ($18 million) in Series B funding. Merian Chrysalis Investment Company Limited led the round, and was joined by investors including Praetura Ventures and NVM Private Equity LLP. 

Flatfair, a U.K.-based deposit-free renting platform, raised $11 million in funding. Index Ventures led the round.

Commsignia Inc, a Santa Clara, Calif.-based V2X company, raised $11 million in funding. Karma Ventures and the Samsung Catalyst Fund co-led the round, and were joined by investors including Partech, Inventure, Credo Ventures and Day One Capital.

Miko, an India-based robotics company, raised $7.5 million in Series A funding. Investors include Chiratae Ventures, YourNest Venture Capital and Bruno Raschle‘s family office.

Talview, an India-based artificial intelligence recruitment startup, raised $6.75 million in Series A funding. Investors include Storm Ventures, Inventus Capital, Eileses Capital, and Emergent Ventures. 

CoachHub, a Berlin-based coaching platform, raised 6 million euros ($6.6 million) in funding. Investors include HV Holtzbrinck Ventures, Partech and Speedinvest x.

Coinmine, a Los Angeles, Calif.-based developer of crypto mining hardware and software, raised $2.5 million in seed funding.  Investors include M13 Ventures, Republic Labs, Gumi Crypto and Shervin Pishevar. 


Cemvita Factory, a Houston-based biotech startup, raised funding of an undisclosed amount, from Oxy Low Carbon Ventures.


Oakley Capital agreed to buy a majority of Seven Miles GmbH, a Germany-based provider of physical and digital gift cards. Financial terms weren’t disclosed. 

ASB Sport, a portfolio company of Trivest Partners acquired The Graphic Edge, a Carroll, Iowa-based printing company. Financial terms weren’t disclosed. 


CrossFirst Bankshares, a Leawood, Kansas-based bank with seven locations, raised $102 million in an offering of 7 million shares priced at $14.50, below its 15 to $17 range. The firm posted interest income of about $156.9 million and net income of $17.5 million in 2018. First Security Bancorp backs the firm. It plans to list on the Nasdaq as “CFB.” Read more.

SmileDirectClub, a Nashville-based seller of teeth straightening products, filed for an $100 million IPO. The firm posted $423 million in revenue for 2018 and loss of $74.8 million. David Katzman and Clayton Dubilier & Rice back the firm. It plans to list on the Nasdaq as “SDC.” Read more.

9F, a Beijing-based provider of digital consumer credit services, plans $85 million in an offering of 8.9 million ADSs (24% insider) at $9.50, the high end of the range of $7.50 to $9.50 8.9 million ADSs priced between $7.50 to $9.50. It booked revenue of $817.9 million in 2018 and income of $294.3 million. It plans to list in the Nasdaq as “JFG.” Read more.


ICONIQ Capital named Doug Pepper as a general partner.