In a press release distributed on Tuesday, Donuts announced that it had made an investment in GeoFrenzy, a company that is in the geofencing business. To me, the most interesting aspect of the press release was when the company stated it would continue making strategic investments:
“The first of several anticipated investments of this kind, Donuts is leveraging its capital and registry expertise to identify and invest in emerging technologies that promote new uses for domain names, leverage the domain name system (DNS), or otherwise are complementary to Donuts’ interests.”
I don’t totally understand how GeoFrenzy aligns with Donuts’ business, but I can imagine other types of strategic investments and acquisitions the company could make in the near future. There are quite a few companies that operate businesses that have overlaps with Donuts or offer technology and services that Donuts could use in conjunction with its portfolio of domain extensions.
I reached out to the company to ask what types of strategic investments the company is considering, and Tim Favia, Vice President of Corporate Development at Donuts shared some thoughts about it with me:
“Donuts has established itself as the clear leader in the new TLD space. As the market leader, we are positioned to be a natural consolidator. As smaller players and portfolios struggle to achieve economies of scale and profitability, in the face of still limited awareness, we anticipate a favorable acquisition environment. In addition to solidifying our leadership position in the space through further acquisition of TLD portfolios, we plan to make strategic bets in early-stage business models that promote new uses for domain names.
We are targeting businesses that leverage the existing DNS infrastructure and broaden Donuts reach into complementary technology areas like: Internet of Things, digital wallets, other types of registries, and other ideas. Target business models should provide leveraged marketing effects both inside and outside of the domain name space, possible intellectual property value and equity growth upside.”
For the last couple of years, industry leaders have predicted more consolidation in the domain space. I think we will see even more of it, and it looks like Donuts is on the hunt for strategic investments and acquisitions.