At last night’s PandoMonthly event, I ran into CloudFlare‘s Matthew Prince and asked him about the rumors that the company is raising money at a near $1 billion valuation.

Prince laughed and insisted that, right now, the rumors are just that: rumors. After all, they still have plenty of money in the bank, and as Prince put it, “spending even more money would be hard.”

Still, that’s not to say Prince and his team hasn’t been pondering Instagram’s recent windfall. I mean, who doesn’t want to build a billion dollar company?

But rather than selfishly focussing on their own valuation, CloudFlare has hatched a plan to turn every one of their client sites into the next Instagram. Oh, and they’ve also just announced a brand new developer program. But I’ll get to that in a second…

First things first. This morning CloudFlare has announced “Instaflare” – a one-click service that allows any of the 400,000+ sites using CloudFlare to instantly “Instragram-ize” every photo on their site, with a number of washed out, artificially aged filters. After all, if Instagram’s sale has taught us anything it’s that crappy photos = billion dollar valuations.

The idea for the service actually came from Twitter user Robert Brown who, at 6pm on Wednesday, Tweeted that “if CloudFlare were to add distorted photo taking to the product portfolio, they might have something there.” Prince thought it was a great — and funny idea — and 24 hours later, CloudFlare developer Michael Sofaer had built and pushed out the feature. You can add it to your site (via CloudFlare) here.

Beneath all this frivolity, though, lies the really cool part of this story. The reason Sofaer was able to push out InstaFlare so quickly is that CloudFlare has been quietly building an independent developer platform that will allow anyone with a bright idea for a site-modifying app to make it easily available across the entire CloudFlare universe.

So far there are just two independent apps available — Trumpet and Earth Hour — but starting today the doors are open to anyone who wants to pitch their idea to CloudFlare.

Says Prince, “What it offers developers is a way to build Web apps and immediately get in front of CloudFlare’s publishers extremely efficiently (a network that’s growing at 20% month over month). We also provide our infrastructure to host the Web apps so they’re fast and free for the developers. It opens up a whole new way for Web apps to be developed efficiently and reach a ton of publishers.”

Prince says they were planning on announcing the apps platform after they had more case studies of developers, but “the InstaFlare app is so perfect and at an ideal moment in time” that they decided to launch now. And the fact that I bribed him with pizza at PandoMonthly meant Price agreed to give us the story first.

Got an idea for a CloudFlare app that’s even better than Instaflare? Apply for the independent developer program here.