There are some “green shoots” in the domain aftermarket.
Escrow.com released its Q4 Domain Investment Index (pdf) today.
Its Q4 2022 was rather dismal, with just $80 million in domain transactions compared to $158 million in Q4 2021.
But there might be light at the end of the tunnel. Q4 was up by $5 million sequentially from Q3. And the company reports that, after a collapse in “mega” domain deals over $10 million, things are starting to look better.
In a separate market report released with earnings on February 22, the company stated that February was shaping up to be the best month since at least July of 2022, and it believes Q1 2023 will be better than Q4 2022.
The company noted that the drop in venture capital funding last year led to a drop in mega transactions. Whereas in the first half of last year, the company closed “many” domain transactions for $10-$20 million, this dried up in the second half. However, the company has already completed one transaction over $10 million this quarter and has quoted one that would be several multiples of its highest transaction ever.
Getting back to the Q4 report, the company reported the median domain transaction (not including content websites) was $4,120, down from $4,504 in Q3. You can view a further breakdown of transactions, including by length, in the full report.
Ryan - DomainAgents says
Crypto collapse would have impacted those high end sales too.
The year is off to a solid start in domains though.
Andrew Allemann says
Yes they mention that in the financial report
The Escrow.com report was always a nice view of the “behind the scenes” sales that don’t get reported . It still is valuable insight and a good view of the market that we don’t hear about with private sales (not coming out of the traditional reported aftermarket venues) .
I wonder though how much of this decline can be attributed to the declines in overall domain aftermarket and how much of it can be attributed to the Escrow.com decline in aftermarket transaction volumes.
I believe the aftermarket took a hit in the last year, but I also feel it is not the overall market taking a dump that has caused Escrow.com numbers to be in decline. It is anecdotal evidence but most of the investors/sellers I know have been seeking alternative solutions. I’m still using Escrow.com but I know bigger deals are looking elsewhere. The undercurrent of dissatisfaction with Escrow.com has to be having an impact on their “market share” but it is not the whole picture of the domain aftermarket.
The reported loss of those “mega sales” at Escrow.com and low numbers could be interpreted as the aftermarket being down overall. When looking at this data, don’t forget it’s just what Escrow.com sees and what they see might only be a portion of what’s happening in private sales in the domain aftermarket. Escrow.com is still a great portion of the “secret aftermarket” that we don’t have access to numbers . I would guess that their own market dominance is certainly being chipped away though.