Because the start-up community is a closely knit one with lots of online communities where they talk to each other. The start-up community or rather the hacking community, those that do hackathons and likes, also use a lot of SAAS products in their day to day activity, saas companies they admire and like and many are on .io
It is something like an Idea that became viral in the community.
And because a lot of start-ups are already using it, people feel comfortable using it.
Just like Esports related companies use .gg and many of the defi companies use .finance etc.
There is no need to overthink. As domainers all we need to see is what type and how many names in a particular TLD is selling and if it it makes sense economic sense to invest in such, and yes it does.
There is no need to think they are stupid, or they are leaking traffic or what not.
Nobody buy domainers care about all that, while we should be the one who shouldn't care and invest on sales data
But it is good that many .com purists still don't believe people actually buy .ios
The wholesale price is already out of reach for us.. We don't need more resellers.
If people are looking for the sort of startups that use .io can Google search on site:.io and go through first number of pages.
@James Iles did an analysis of the domain names used by about 1000 startups not long ago. That study found that 7% were using .io vs about 60% using .com. The .io figure was almost double that for .net and .org combined.
I don't think a highish renewal fee is a negative to an end user, and in fact the lower level of abuse with TLDs with high registration/renewal is a plus that is probably more important. The renewal fee does mean that domain investors must be selective in their .io holdings.
The interest in .io was in early years definitely within the coding community, propelled by some significant users. But now it is much broader, although not as broad as .co.
It remains to be seen whether the political efforts to repopulate the area will impact the view of .io. A few end users have left because of that controversy. That said, there is no sign of a weaker aftermarket, and the highest-ever reported sales in extension are in 2021, I believe.