Building a billion dollar business on a .IO domain – Confluent.io raises $125M Series D at $2.5B valuation

confluent-raises-seriesDI think it’s safe to say that Confluent.io has proven that you absolutely can build a billion dollar business, while branding on a .IO domain name. The company has been on an incredible growth trajectory after raising their Series A round back in 2014 at a $26M valuation.

confluent-valuation-growth(Source – Confluent)

The CEO of Confluent Jay Kreps wrote a bit more about why the company has grown so fast in a blog post announcing the funding.

Confluent is a company that was founded around a big idea and that idea is starting to become a mainstream reality. We think there is a really fundamental missing ingredient in the software architecture of a company, namely the idea of “events.” These events are the orders, sales, and customer experiences, that constitute the operation of the business. Databases have long helped to store the current state of the world, but we think this is only half of the story. What is missing are the continually flowing stream of events that represents everything happening in a company, and that can act as the lifeblood of its operation. (Source – Confluent blog)

This is a huge idea and something that is clearly already revolutionizing the way companies around the world are thinking about how they evolve their software and utilize databases.

While I’m a big fan of .COM and a majority of the domains I own are .COM, I’ve heard people say things like, “you can’t build a big business without the .COM” and I’ve always rejected that idea. The reality is we are still in the early days of the Internet and people around the world are just now starting to take other extensions seriously, or even learn that they exist.

Confluent.io was able to build a multi-billion dollar business on a .IO domain. I’m not sure if they tried to get the .COM, or if they will try to now, but if they do, it’s clear they didn’t need it to get to where they are today.

I’m going to reach-out to Jay to see if he can share his thoughts about building the company on a .IO domain. Either way, it’s pretty awesome to see, and while .COM is still #1 in mine and just about everyone else’s book, this shows that you don’t need a .COM to build a multi-billion dollar business.

{ 14 comments… add one }

  • Andrew Rosener February 8, 2019, 8:26 am

    The ONLY reason they can succeed at that scale with a .io domain is because it is a 100% B2B / Enterprise business where the domain and email is far less important. Also, most of their business is fed to them by their VC’s, at least in the early days. Not putting them down at all, its an incredible business they have built. But if it was consumer facing they would already be dead in the water or would have been forced to buy the .COM by their customers or investors.

    All that being said, I can promise you that whoever owns the .com is getting a TON of sensitive emails and traffic that if the executives and board of Confluent actually knew and understand they would not hesitate to buy the .com, regardless of price.

    I also promise you that there is not a day that goes by that the CEO / Founder / Chairman / Marketing folks don’t have an irritating thought about “Why don’t we just have the .com?” This stuff eats at you. You don’t become the CEO or Founder of a $1B plus company unless you are hyper competitive. If you are, then you can’t simply accept that you have an inferior domain.

    Reply
  • Jack February 8, 2019, 9:28 am

    100% agree with Andrew.
    There is no doubt they will buy the .COM whatever the cost ends up being.

    You can’t do business at that level with a .IO
    Emails leaks are just too sensitive and they must be upset a thousand times a day saying :
    no it’s not .COM, it’s .IO

    Reply
    • Snoopy February 8, 2019, 2:30 pm

      Can you imagine the CEO talking to large businesses and bankers and having to explain what .io is? It is a embarrassing domain they have.

      Reply
  • Michael D. February 8, 2019, 9:48 am

    What Andrew said. It’s not a consumer facing and the .Com gets their emails. Also, they’re risking someone grabbing the .Com and doing whatever with it. Just happened here this week, we quoted a six figure range for a .com domain to a major global brand where this is their EMD and they never went much above low five figures. This week, a porn company bought the name without hesitation for a low six figures.

    We all know of these potential scenarios, we talk about it. This time it’s happening.

    How much would that cost the EMD brand now to rebrand?

    Reply
  • Michael D. February 8, 2019, 10:25 am

    https://www.disrupt.com/ could have been a TechCrunch domain for a low six figure price, was available for a long time until gone. They saved money and didn’t buy it and their brand is now in the hands of another.

    Reply
  • Snoopy February 8, 2019, 1:11 pm

    They haven’t “built a billion dollar business”, they’ve raised $200 million to try and do that.

    Behind the scenes they’ll have been desperately try to buy the .com.

    Reply
  • John February 8, 2019, 3:19 pm

    I like what Andrew said too.

    And In my opinion, domainers themselves and the likes of Estibot aside from the likes of Google are to blame for this trend in toxic virulent lowballing.

    Reply
  • Ethan February 8, 2019, 10:24 pm

    As someone who invests in both .com and non-.com TLDs, it’s great to me to see more success stories like this one.

    Like Morgan said, we are still in the early days of the Internet. I believe it’s really just a matter of time for the world to become more familiar with non-.com TLDs.

    Reply
    • Snoopy February 8, 2019, 11:43 pm

      It never lasts, how many of these not .com users that Morgan has blogged about are still using a not .com 5 years later?

      Look at all the famous examples o.co, del.ico.us, 50inda.club.

      Reply
  • Rick Schwartz February 9, 2019, 3:34 am

    I don’t think anything has been proven other than pitfalls they are sure to experience and they are all invisible and unknown to them and their investors. It’s always a one-sided equation. And raising money is not part of either side of the equation.

    It’s about profit and how much profit is lost from those leaks YEAR after YEAR after YEAR. That is a HUGE number capable of paying for .com many many many times over.

    AND….it stunts growth by an unknown percentage.

    So when we talk about Billion Dollar companies, that’s a tremendously large number.

    Can these geniuses EVER just do the math?? EVER!!?? Lose only 2%, and it’s a HUGE number. Lose 5%, but in general, you can expect to lose much more. We are talking TENS of millions of dollars, and then you multiply that by years, and then you have to add in stunted growth. Now we are in 9 figure land. So easy a caveman can do it!!!! LOL

    Reply
  • Gene February 9, 2019, 12:39 pm

    And let’s say they’re never able to acquire the dot-com – does anyone really think that that will mean bankruptcy for this company? Apparently the (obviously unsophisticated) VCs who just poured $125mm into this firm didn’t think so.

    Look at the WHOIS record: There’s not even a contact email. So unless the current owners of the dot-com approach these guys, there may be no way to even find out who the owner is.

    The bottom line is that while they may be leaking traffic, emails, etc., they seem to be doing just fine. And like most, niche, enterprise software firms, they’re eventually going to be bought by a competitor; so just as their domain name didn’t inhibit their market cap from hitting $2b, it’s also not going to be a barrier to their acquisition for $10b in a few years.

    Reply
  • Snoopy February 9, 2019, 5:28 pm

    The email address is right there on the lander.

    Reply
  • Snoopy February 9, 2019, 5:44 pm

    Regarding the other question it isn’t going to send them bankrupt it is just a great big leak that could have been easily avoided. It is a bit like using a host who you know has 2% downtime or hiring an accountant who stole money from his last client. Just because it doesn’t sink the company does not mean there isn’t an obvious problem that needs fixing.

    Reply
  • Tom Fisher February 10, 2019, 1:11 am

    Doing business on a .IO is like running a marathon with a 60 lbs backpack on.
    Sure you can still run but you’re making things much harder.
    The farer you go, the harder it gets…

    Time to get rid of this heavy backpack.

    Reply

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