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Replicate is joining Cloudflare

replicate.com

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Re: Replicate is joining Cloudflare

#21

Post by NicoJuicy »

redwood wrote: post #18
NicoJuicy wrote: post #14

Earlier quoted context omitted.

Really? Cloudflare isn't solely a CDN anymore. CDN and DDOS-protection were the most logical "first" products to build based on their SDN ( Software Defined Networking). A cloud is the next thing and there's a lot of money involved with the cloud. I see them as the only real competitor/challenger to Azure, AWS, GCE, ... because they aren't bound to regions ( less DevOps) For example, what you might not know about Dur…

I'm not saying they're not an interesting company I'm just reflecting on their extraordinary valuation multiple which puts them in a unique league that are predominantly AI bets. Their founder is uniquely strong storyteller. If you look at their capital investment it's just not anywhere close to a top tier cloud player.. so while they offer some interesting building blocks it's just not clear that large workloads mov…

Cloudflare went x 10 since their IPO 6 years ago ( stocks).

Revenue:

$ 85 million (2016)

$ 287 million (2019) IPO year

$ 1,670 million (2024)

$ 2,154 million (2025)

https://www.macrotrends.net/stocks/charts/NET/cloudflare/rev...

That's not a crazy valuation multiple considering their growth.

Palentir is a body shop. Cloudflare is infrastructure/cloud. Very big difference ( at least to me)

Stock ( Cloudflare - https://finance.yahoo.com/quote/NET/holders/ ): 90.87% % of Shares Held by Institutions

Stock ( Palantir - https://finance.yahoo.com/quote/PLTR/holders/): 60.09% % of Shares Held by Institutions

Re: Replicate is joining Cloudflare

#23

Post by svara »

redwood wrote: post #5

Cloudflare is one of those companies similar to palantir where the valuation just makes you scratch your head. But bringing in AI to try and fill out the AI valuation makes some sense I suppose

I wrote this comment [0] very recently and when I wrote it had in mind that Cloudflare might very well end up being a key player in a more centralized Internet that has developed far away from its original architecture.

Defense against threats is a pretty strong centralization incentive in different kinds of networks - social, biological.

I could imagine that a lot of people are investing based on similar scenarios in their minds.

[0] https://news.ycombinator.com/item?id=45946365

Re: Replicate is joining Cloudflare

#24

Post by NicoJuicy »

svara wrote: post #23
redwood wrote: post #5

Cloudflare is one of those companies similar to palantir where the valuation just makes you scratch your head. But bringing in AI to try and fill out the AI valuation makes some sense I suppose

I wrote this comment [0] very recently and when I wrote it had in mind that Cloudflare might very well end up being a key player in a more centralized Internet that has developed far away from its original architecture. Defense against threats is a pretty strong centralization incentive in different kinds of networks - social, biological. I could imagine that a lot of people are investing based on similar scenarios i…

> that has developed far away from its original architecture

This was always their architecture, if you watched closely.

My predication 5 years ago - https://news.ycombinator.com/item?id=26821438

> And cloudflare is self hosting it on more edge locations ( i think they could even join the big 3 soon)

Re: Replicate is joining Cloudflare

#25

Post by redwood »

NicoJuicy wrote: post #21
redwood wrote: post #18

Earlier quoted context omitted.

I'm not saying they're not an interesting company I'm just reflecting on their extraordinary valuation multiple which puts them in a unique league that are predominantly AI bets. Their founder is uniquely strong storyteller. If you look at their capital investment it's just not anywhere close to a top tier cloud player.. so while they offer some interesting building blocks it's just not clear that large workloads mov…

Cloudflare went x 10 since their IPO 6 years ago ( stocks). Revenue: $ 85 million (2016) $ 287 million (2019) IPO year $ 1,670 million (2024) $ 2,154 million (2025) https://www.macrotrends.net/stocks/charts/NET/cloudflare/rev... That's not a crazy valuation multiple considering their growth. Palentir is a body shop. Cloudflare is infrastructure/cloud. Very big difference ( at least to me) Stock ( Cloudflare - https:/…

It's not a question of crazy or not, it's just an extreme end of the multiple spectrum.. and the company is not in a positive operating margin position. So you're right they have a strong track record and there's optimism they turn a profit, but it's highly speculative. Nothing wrong with that. Just makes sense they are fleshing out their AI story while they're in a position to invest with equity IMO

Re: Replicate is joining Cloudflare

#26

Post by NicoJuicy »

redwood wrote: post #25
NicoJuicy wrote: post #21

Earlier quoted context omitted.

Cloudflare went x 10 since their IPO 6 years ago ( stocks). Revenue: $ 85 million (2016) $ 287 million (2019) IPO year $ 1,670 million (2024) $ 2,154 million (2025) https://www.macrotrends.net/stocks/charts/NET/cloudflare/rev... That's not a crazy valuation multiple considering their growth. Palentir is a body shop. Cloudflare is infrastructure/cloud. Very big difference ( at least to me) Stock ( Cloudflare - https:/…

It's not a question of crazy or not, it's just an extreme end of the multiple spectrum.. and the company is not in a positive operating margin position. So you're right they have a strong track record and there's optimism they turn a profit, but it's highly speculative. Nothing wrong with that. Just makes sense they are fleshing out their AI story while they're in a position to invest with equity IMO

Their not investing with equity. Cloudflare is cash flow positive and re-investing.

Re: Replicate is joining Cloudflare

#27

Post by redwood »

NicoJuicy wrote: post #24
svara wrote: post #23

Earlier quoted context omitted.

I wrote this comment [0] very recently and when I wrote it had in mind that Cloudflare might very well end up being a key player in a more centralized Internet that has developed far away from its original architecture. Defense against threats is a pretty strong centralization incentive in different kinds of networks - social, biological. I could imagine that a lot of people are investing based on similar scenarios i…

> that has developed far away from its original architecture This was always their architecture, if you watched closely. My predication 5 years ago - https://news.ycombinator.com/item?id=26821438 > And cloudflare is self hosting it on more edge locations ( i think they could even join the big 3 soon)

Joining the big three requires capital investments orders of magnitude beyond where they are. Nevertheless I'd like to see someone do it, and if not Equinix then it could be them. But sadly the #4 right now appears to be Oracle.

Re: Replicate is joining Cloudflare

#28

Post by jillesvangurp »

aryanchaurasia wrote: post #6

why sell if they were doing good?

Probably because their last funding round was in 2023 and they may have been looking for another round because their revenue and cost were probably not really adding up to the valuation needed for another round. Running GPU hardware at scale is just expensive

Given the price was not announced, it seems investors decided to exit via acquisition instead of trying to raise a multi hundred million round consistent with a multi billion dollar valuation and a high level of ambition that investors are shooting for in this space.

If the amount was high, they'd be be bragging about it. Given that they aren't, it might be on the lower end of the 2023 valuation for the then 40M round.

Just speculating here; I don't have any more information. Basing this on my understanding of how this stuff works. This might actually be the opening round for a few more such acquisitions of the somewhat risky investments of a few years ago of companies that are probably not going to turn into trillion $ unicorns. There are lots of pretty well funded startups in this space converting investment capital into cloud GPU cost. I think some level of consolidation is overdue and might take away some building concern about over exposure in the market. Big banks and investors might be getting nervous.

Re: Replicate is joining Cloudflare

#29

Post by mritchie712 »

echelon wrote: post #8
simonw wrote: post #3

Congrats Ben and team! I think this is Cloudflare's most notable acquisition yet? From Wikipedia it looks like they've previously mainly acquired smaller cybersecurity firms like https://en.wikipedia.org/wiki/Area_1_Security

I don't know that this was an acquisition in the sense that the Replicate investors and team made bank. I don't see a price tag, and the market for these "run model" infra companies is pretty crowded.

replicate "only" raised $50m, so I'd wager the founders, investors and early employees did well here.

If they raised $500m... then yes, the wouldn't have done so well.

Re: Replicate is joining Cloudflare

#30

Post by ramimac »

simonw wrote: post #3

Congrats Ben and team! I think this is Cloudflare's most notable acquisition yet? From Wikipedia it looks like they've previously mainly acquired smaller cybersecurity firms like https://en.wikipedia.org/wiki/Area_1_Security

Probably, but you can check out a more robust list here: https://blog.cloudflare.com/tag/acquisitions/

* BastionZero

* Kivera

* Baselime

* PartyKit

* Area 1

* Vectrix

* Zaraz

* Linc

* S2 Systems Corporation

* Neumob

* Eager

* CryptoSeal

* StopTheHacker

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