Google, Microsoft, Qualcomm And Baidu Announce Joint Investment In CloudFlare

CloudFlare CEO Matthew Prince

Google GOOGL -2.46%, Microsoft MSFT -2.33%, Qualcomm QCOM -0.96% and Baidu have all joined forces in a strategic investment in CloudFlare. The five-year-old security startup announced Tuesday that the four Internet giants had all participated in Cloudflare’s latest $110 million funding round led by Fidelity.

The strategic investment is evidence of CloudFlare’s vision to expand globally while honing in on mobile and enterprise. Today’s funding announced comes just over a week after CloudFlare unveiled a new partnership with Baidu to bring its security services to China’s 650 million Internet users. With more than four million customers in 30 countries, CloudFlare says it processes 5% of all Internet requests each month and mitigated more than 200 billion cyber attacks in August alone.
CloudFlare CEO Matthew Prince is far more focused on the strategic partnerships the funding round created than the cash it generated—less critical for the already-profitable CloudFlare. Prince says CloudFlare still has $50 million from its Series C in the bank, while this round brings the startup’s total investment to $182 million.

Instead, Prince says the partnerships with Google, Qualcomm, Microsoft and Baidu stemmed an attempt to answer five big questions CloudFlare has been asking itself as it contemplates its future growth: 1) What’s your China strategy? 2) What’s your mobile strategy? 3) How will you sell to big enterprises? 4) How will you work with Google? 5) Will the public market take you serious seriously?

Investments from four large public companies provides a clear answer to the last question. After working with Cloudflare on the partnership announced last week, the Chinese search giant approached CloudFlare about an investment. The term sheet’s numbers were so high Prince says he blushed when he first saw it. Encouraged by Baidu’s interest, CloudFlare turned to key U.S. companies it felt would help the startup expand in key areas. Qualcomm was CloudFlare’s answer to chips and mobile, while Microsoft held the key to enterprise customers. By partnering with Google, CloudFlare is able to build on its existing partnership with the search giant.

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Finally, CloudFlare’s partnership with and investment from Baidu has allowed the startup to enter the exploding Chinese market. “China is a complicated market,” Prince says, noting that the deal with Baidu took four years to bring to fruition.

Now, the startup has 17 data centers in China and hopes to grow that number to 50 by next year. In just one day of operation, CloudFlare says its already saved Chinese users 243 years of time that might have been spent waiting for content to load.