Cloudflare has tapped Goldman Sachs to lead an initial public offering that is expected to come in the first half of next year, according to a Reuters report.
The San Francisco-based web performance and security vendor believes it could be valued at more than US$3.5 billion in the IPO, Reuters indicated. The report noted that Cloudflare is looking to go public in the first half of next year, people familiar with the matter said, although the exact timing of the IPO hasn't been finalised.
Neither Cloudflare nor Goldman Sachs immediately responded to a request for comment.
Cloudflare last received outside funding in September 2015, when Google Capital, Microsoft, Qualcomm and Baidu all participated in a US$110 million Series D round led by Boston-based financial services firm Fidelity investments. All told, Cloudflare has hauled in US$182.1 million since the company was founded just 9.5 years ago.
From a workforce perspective, Cloudflare has enjoyed massive growth over the past two years, going from just 341 employees in October 2016 to 494 employees in October 2017 to 787 employees today, according to LinkedIn. From a functional standpoint, Cloudflare has done the most hiring in its business development and sales teams, with each increasing headcount by at least 85 percent since last year.
Cloudflare last year launched a new system for securing internet of things devices. The offering, called Orbit, provides a new approach to security so that IoT manufacturers can configure their devices to connect with the internet through Cloudflare's network.
By doing this, manufacturers are able to easily patch a vulnerability without having to 'brick' or shutdown a device, according to Cloudflare. The offering uses Cloudflare's firewall in the cloud to protect devices that are running vulnerable code and catch exploit attempts like Distributed Denial of Service attacks, according to Cloudflare.
Orbit also authenticates devices to ensure they actually belong to a user's network and are not a malicious hacker trying to infiltrate the IoT infrastructure.
Cloudflare would follow in the footsteps of five other cybersecurity vendors that have gone public this year. Cloud security player Zscaler kicked things off in March, raising US$192 million in a Nasdaq public offering, and next-generation endpoint security vendor Carbon Black hauled in US$152 million in a Nasdaq public offering in May.
That same month, legacy endpoint security vendor Avast raised US$194.7 million in gross primary proceeds from an IPO on the London Stock Exchange. In late July, security and cyber-risk vendor Tenable raised US$250 million in a Nasdaq IPO. And in August, Israeli software defined access provider Safe-T Group raised US$7.3 million in a Nasdaq public offering.
Just last week, Reuters reported the next-generation endpoint security vendor CrowdStrike has hired Goldman Sachs to prepare an initial public offering that could come in the first half of 2019. CrowdStrike is looking to be valued at more than the US$3 billion valuation assigned to the company during a funding round earlier this year, according to the company.