But just how much? They don’t want you to know.
Last night when I received Donuts’ press release about a follow on investment I had to re-read it a few times.
While the press release didn’t divulge exactly how much the company raised, it did say that the new funds “nearly doubles our capacity to compete” in new TLD auctions.
The company previously announced a $100 million raise. So does “nearly doubles” mean it raise another $100 million?
I don’t think so.
The company applied for 307 domain names at a cost of $185,000 each. That means it spent close to $60 million on applications alone. So lets say it had $40 million left. That means the company may have just doubled its auction warchest by raising “just” $40 million.
It’s not chump change, and I’m sure Donuts raised a lot of cash.
But now we’re at the part of the new TLD game where applicants want to scare off competitors. By throwing out general terms like “doubling”, competitors might be more scared than they need to be.
In February portfolio applicant Top Level Domain Holdings announced it had secured up to $15 million to bid on a single domain name. It likely didn’t name the TLD for competitive reasons, but by leaving it up in the air it achieved another benefit: competitors have to worry about going up against a $15 million bid on any of the domains TLDH is applying for.
If you’re applying for a TLD that TLDH is also applying for, and you’re small fish, now you need to think about if you’re going to go through the entire process only to face the one domain for which TLDH has earmarked $15 million.
There’s a big chess game going on right now. Expect applicants to give some of the story when it benefits them, but to leave just enough out to keep their competitors guessing…
If you are going up against google, amazon, lol 100M is chump change.
Rubens Kuhl says
The tricky part is not knowing the overall availability of money. Publicly-listed companies including Google, Amazon and Donuts officers have fiduciary responsibilities, so they can’t throw away money at something just because they can. There has to be a rationale; they can move IRR around, but there has to be ROI.
Andrew Allemann says
Donuts is not public. For the others this is a rounding error.