Cloudflare, the US-based cloud services provider backed by corporates Microsoft, Alphabet, Baidu and Qualcomm, went public on Friday in a $525m initial public offering.
The offering consisted of 35 million shares issued on the New York Stock Exchange priced at $15.00 each. The company increased the IPO’s range from $10 to $12 to $12 to $14 on Wednesday last week but still floated above its range.
Cloudflare offers a range of services for web property operators that helps them increase performance of their sites, host video content and protect themselves from distributed denial of service attacks and other cyber threats. It made a $36.8m net loss from $129m in revenue over the first six months of 2019.
The company had raised $332m in funding, $150m of which came in a series E round led by investment management firm Franklin Templeton in March this year at a $3.2bn valuation.
Internet and technology group Alphabet, semiconductor technology producer Qualcomm, software provider Microsoft and internet group Baidu all participated in the company’s $110m series D round in 2015, the first two through subsidiaries CapitalG (then known as Google Capital) and Qualcomm Ventures.
The round was led by financial services and investment firm Fidelity Management and Research and included existing backers New Enterprise Associates, Pelion Venture Partners, Greenspring Associates, Venrock and Union Square Ventures.
NEA is Cloudflare’s largest shareholder, with a 20.4% stake diluted to 18% in the offering. Its other notable investors are Pelion Venture Partners (20.3% post-IPO), Venrock (14.2%) and Fidelity (4.9%).
The company’s shares closed at $18.00 on their first day of trading. Goldman Sachs, Morgan Stanley and JP Morgan Securities are joint lead book-running managers for the IPO while Jefferies, Wells Fargo Securities and RBC Capital Markets are joint book-running managers.
JMP Securities, Evercore Group, Needham & Company, Oppenheimer, BTIG and SunTrust Robinson Humphrey are co-managers for the offering. The underwriters have the 30-day option to acquire a further 5.25 million shares to lift its size to approximately $604m.
