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James Iles

Domain Data: Just 67% of These Startups Are Using .COM

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By James Iles, Feb 15, 2017
  1. James Iles

    James Iles NamePros Writer PRO Trusted Blogger Business Account VIP

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    In previous editions of our Domain Data series, we’ve taken a look at a number of areas of domain name investing. We’ve also looked at the domains used by companies that have received investment from several different popular venture capital firms. The data from venture capital investments has been interesting, and has shown an overwhelming use of .COM domains versus domain hacks or other domain extension alternatives.

    It’s also shown that if a company wants an exact match .COM, in most cases they will go out and buy it, which makes sense since they usually have the funding in place to afford such vital purchases. But what happens when you may not have the budget for a big .COM purchase? Do you go for a second rate .COM, or do you get a little more creative in your online branding?

    In this edition of Domain Data, we’ll be taking a look at 265 companies that have been funded by 500 Startups between January 2014 and late 2016. 500 Startups is an early stage seed accelerator program that usually invests $125,000 into a company. Along with this investment, each company receives mentoring and guidance through 500’s four-month accelerator program. The program has helped the likes of Grab, Behance and MakerBot to become extremely successful companies in the past, and 500 Startups continues to nurture plenty of innovative startups.

    But what do the domains of these startups look like? Let’s find out.


    The Companies

    We took analysis from 265 startups that 500 Startups have worked with since the beginning of 2014. These are companies from all around the world, from the property search portal 99.co in Singapore to the marijuana delivery company Eaze in San Francisco.

    There’s no specific industry for each of these companies, they simply hold a common link by the fact that 500 Startups have invested in them. The average length for the company name (not the domain name) is 9 characters. This is for reference for later on in this article when we take a look at the average length of each domain.

    As we mentioned earlier, 500 Startups usually invest $125,000 in a company, but the majority of companies develop and raise additional funding elsewhere. From the 265 startups in our list, the average total equity funding to date is $2.2 million, with the largest funding amount being Finova Financial at $52.5 million.


    The Domain Extensions

    We have some extremely interesting results here. In terms of the domain extension used by each company, we have a more even playing field. In past editions of Domain Data, .COM has been dominant, with upwards of 85% to 90% of companies we tested using .COM. Sequoia Capital companies, for example, had 98% .COM usage. Here, it’s far less.

    500.jpg
    Just 67% of the startups on our list are using .COM, with far more opting for new domain extensions or country code domain extensions. Below is a pie chart with data from the domain extensions on our list. In total, there were thirty-four different domain extensions used, most with just one or two occurrences such as .MY or .JP. The pie chart shows the six most popular extensions.

    As you can see, .COM is still the most used by a long way, which you’d expect. However, we do see an enormous amount of other extensions in use, with .CO and .IO being relatively popular. These two extensions have traditionally been seen as being popular alternatives to expensive .COM’s for early stage startups, and we have proof of that here. It’s also interesting to see that .NET is far less popular than .IO or .CO.

    I think that this shows that many smaller startups are looking to creative solutions for domain names, often seeking alternative extensions in order to find the right name. There are several cases of startups adopting new gTLDs here, something that is rarely seen in larger companies we’ve analysed.

    For example, smart textiles company Siren is using siren.care and Norwegian startup Graphiq is using graphiq.design.


    Characters

    In terms of the length of each domain name, we’re seeing a mean average character length of eight, which is on par with the previous editions of Domain Data. The median average is also eight.

    26% of the startups listed are using a domain that’s between four and six characters, whereas just one startup is using a domain with less than four characters. That is 99.co. The average total funding amount for a company on this list with up to six characters in their domain is $3.66 million, whereas those companies with seven or more characters has an average funding amount of $1.7 million. This doesn’t necessarily suggest anything, but I thought it was interesting to note.

    Of those companies using domains consisting of six characters or less, just 47% are using .COM, down from the overall average of 67%. This would seem to suggest that whilst many startups desire a short .COM, for whatever reason it’s not always viable or accessible, so they turn to other extensions such as .IO or .CO.


    Age

    In past editions of Domain Data, we’ve seen a relatively large amount of companies owning domain names that were registered before the year 2000. In some cases, 20% or more of companies we’ve analysed in the past have bought a domain registered in the 90's.

    Within the 500 startups list, this is far lower. Just 4% of companies are using a domain registered before the year 2000. The average age of a domain name here is just three and a half years, with a quarter of all domain names registered after January 2015.





    We are unable to provide a downloadable list of these companies and specific data involved, since the data was acquired with a Crunchbase Pro license and sharing the data publicly would violate Crunchbase’s data access terms. Nonetheless, it’s interesting to see the domain and branding habits of early stage startups such as this.
     
    The opinions expressed on this page by users and staff are their own, not those of NamePros.
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  4. James Iles

    About The Author — James Iles

    Writer for NamePros.com, domain name investor and broker. For all inquiries relating to stories and interviews, please email: [email protected]

    This is James Iles's 327th blog post on NamePros. View all blog posts

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  5. Comments (10)

  6. elevator

    elevator Active Member VIP

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    Once again @James Iles you have provided a nice data.

    Thanks
     
  7. Fuadiansyah

    Fuadiansyah Established Member

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    So, it means .io, .ai, and .co are worth investing now?
     
  8. Domains - Wanted

    Domains - Wanted Active Member VIP

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    The age of the domains suggests that many of the .COM alternatives may have been chosen because they were available at the time to be hand registered for $xx, rather than acquired in aftermarkets for $x,xxx+.
     
  9. 168

    168 Active Member VIP

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    "Within the 500 startups list, this is far lower. Just 4% of companies are using a domain registered before the year 2000. The average age of a domain name here is just three and a half years, with a quarter of all domain names registered after January 2015"

    Ave. 3.5 yrs
    25% 2 yrs.
    Amazing.

    Great article.
    Cheers
     
  10. ChelseaDott

    ChelseaDott Account Auto-Closed

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    Very informative
     
  11. Robert91

    Robert91 Account Auto-Closed

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    startups in their initial phase have a very limited scope of business so they really don't need .coms , however it will be a good future investment.
     
  12. garptrader

    garptrader Active Member VIP

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    The most likely time for a company to acquire a new name is during its formation. It is interesting to note the extensions that startups are using, but as investors we have to ask how many startups are buying aftermarket domains? Probably very few. Whether they have .COM, CCTLD or a new TLD, most are finding something for reg fee and bypassing domainers altogether. So then how do you pay renewals?
     
  13. JB Lions

    JB Lions Business Member Business Account VIP

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    So missing some important data. Out of those 265 looked at, how many are using new gtlds exactly?
     
  14. kemjika11

    kemjika11 Top Member VIP ★★★★★★★★★★

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    Cctlds keep gaining on .com. .in has been and will remain strong.present on every new startup report from @Doron Vermaat
     
  15. pablohc86

    pablohc86 Active Member VIP

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    Thanks James for share this research, it's really informative
     
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