The Venture Codex

Participated · Debt Financing · Aug 2017

Donuts Inc. is a global leader in top-level domains that promotes and enhances digital identity. Led by CEO Bruce Jaffe, the company offers 238 high-quality TLDs including .email, .guru, .social, .business, .life and .restaurant. Donuts has offices in Kirkland, Denver, Washington, DC, Dublin and Beijing. The company has invested in Netki and Geofrenzy and acquired the Rightside Group to expand its portfolio and complementary technologies. Donuts says it is leveraging industry expertise to identify and invest in emerging technologies that enhance the domain name system (DNS) and complement its business and growth strategy. Its recent financing activity supports corporate purposes and strategic transactions such as the Rightside merger. Donuts operates as a registry pursuing new gTLDs being introduced by ICANN, having applied for 307 strings. The company raised a Series A of more than $100 million last June and has now completed a Series B that it says doubles its available capital. The Series B amount was not disclosed publicly but is described as being in the “tens of millions” and was oversubscribed. The new financing includes additional funding from Columbia Partners Private Capital and complements an existing senior line from Comerica Bank. Donuts says the capital is earmarked to participate in auctions and otherwise acquire contested gTLDs in the coming months. Donuts sells TLDs to registrars (for example GoDaddy) rather than directly to consumers and plans to partner with Demand Media as its registry services provider. Donuts is launching as a registry for new top-level domain names and has filed 307 applications with ICANN to expand the Internet namespace. The company plans to wholesale its new gTLDs to popular registrars like GoDaddy and Hover rather than sell directly to end users. Donuts has partnered with Demand Media to provide registry services and says it will not apply for trademarked/branded strings. The company has raised over $100 million in capital from private equity and venture funds and has a revolving credit facility with Comerica Bank to help secure and operate applied-for domains. Donuts is Washington-based, led by industry veterans (including CFO Kevin Wilson, the former CFO of ICANN), and plans to grow its team as it pursues what it calls a billion-dollar-plus market. Donuts is operating in stealth mode and has disclosed few public details about its product or market. The company is led by Paul Stahura, who previously founded domain registrar eNom and served in executive roles at Demand Media. An SEC filing shows Donuts has raised $1 million in equity financing; the filing also lists a possible offering amount of $80 million, a figure Stahura disputes. Donuts was created on January 4th of this year according to Washington state corporate records and is described as a Seattle-area company. Directors named in the filing include Robert Verratti and Chris Pacitti. Executives listed include Richard Tindal, Jonathon Nevett, and Daniel Schindler. Aside from the SEC filing and leadership roster, the company has not publicly disclosed its product, customers, or additional financial metrics.