Earlier today Donuts Inc. (stands for Domain Nuts) website went live. According to an official press release on the site, we now know that the company has raised more than $100 million in funding in plans to expand the domain space with 307 new generic top level domains that the company has applied for with ICANN. Their main objective is to “significantly widen internet identity competition and choice.”
Paul Stahura, co-founder and CEO of the new startup says: “Namespace expansion will help the Internet continue its evolution toward specificity for users, some of them altogether new to the Internet… “Donuts will play a significant role in making that expansion stable, secure and inclusive for all end-users and consumers.”
Over $100M Raised In Capital
The company’s efforts are funded by more than $100 million raised from multi-billion dollar private equity and venture funds. Donuts executives say they intend to deploy capital and raise additional funding if necessary in order to secure and operate each applied for new gTLD.
Austin Ventures — With $3.9 billion under management across ten funds, Austin Ventures has provided start-up and growth capital to emerging companies for over 25 years. Austin Ventures partners with exceptionally talented entrepreneurs and operating executives to build valuable businesses in a variety of technology and service industries.
Adams Street Partners — Adams Street Partners is one of the largest managers of private equity for institutional investors, managing over $22 billion of committed capital. With a globally integrated investment platform, Adams Street is committed to understanding the entire private equity landscape and accessing the most attractive investment opportunities.
Emergence Capital Partners — Emergence Capital Partners invests exclusively in early and growth stage technology-enabled services. Emergence manages $575 million across three funds and is actively seeking new investment opportunities.
TL Ventures — With over $1.5 billion under management, TL Ventures has been actively engaged in the business of venture capital since 1988, investing in over 200 companies to date. TL Ventures invests in companies led by outstanding management teams capable of building category-defining businesses in the software, information technology infrastructure and services, communications and biotechnology industries.
Generation Partners — Founded in 1995, Generation Partners is a private equity firm with $345 million of capital currently under management. Generation provides equity capital to growth companies through buyout and growth equity investments. Generation Partners focuses on recurring revenue service businesses with strong growth drivers, and specializes in helping companies break through the $100 million mark and beyond.
Stahurricane — Stahurricane is Chairman and CEO Paul Stahura’s private investment fund.
The company has further obtained a senior secured revolving credit facility with Comerica Bank. Stahura said: “Donuts is ready to raise additional funding should circumstances warrant. Our investors are very optimistic about both this opportunity and our plans,” he said in the press release that hit the wires today.
Expanding Domain Naming Space
The company’s effort will expand currently constrained domain space. According to them, the current namespace the fulcrum of commercial online navigation, is badly constrained, and consumers and businesses need new options for Internet identities. Donuts Inc. CEO Paul Stahura said:
“Finding a usable Internet address is a real problem. There are more than 125 million total names in the top five TLDs, with three fourths of them in .COM alone. The Internet was opened for worldwide use almost 20 years ago, and we’ve had only 22 generic names made available since then. We’re overdue for expansion.”
Stahura also anticipates strong competition to the currently dominant .COM extension. “This expansion is going to be disruptive in a positive sense. There’s no question competition is coming to .COM and other TLDs—how much of the market the new TLDs will take from them is what remains to be seen.”
Donuts will operate inclusive gTLDs and agrees that no entity or group of entities have exclusive rights to generic terms at the top level, nor do they at the second level. Donuts will be further inclusive in its registration policies and, in order to avoid harm to legitimate registrants, will not artificially deny access, on the basis of identity (without legal cause), to a TLD that represents a generic form of activity and expression. Donuts believes there are superior ways to minimize the potential abuse of second-level names.
Domain Nuts Team
Donuts was founded by Paul Stahura, Richard Tindal, Jonathon Nevett and Daniel Schindler. Four industry veterans with extensive experience in registry and registrar operations and industry governance, and who have successfully launched TLDs, built industry-leading companies, and brought value and choice to the domain name marketplace.
The company has rounded out its executive team with three new hires last month, and each with previous domain name industry experience:
Kevin Wilson has been named Chief Financial Officer. For almost four years, until January 2011, Wilson was CFO for the Internet Corporation for Assigned Names and Numbers (ICANN, the industry’s policy development organization), and previously held financial leadership positions in varied industries, including Internet, technology, financial services, real estate and others.
Mason Cole, an executive from SnapNames and Oversee.net and a leader in ICANN policy development, has been appointed Vice President of Communications and Industry Relations. Cole is a 12-year veteran of the domain name industry.
Alvaro Alvarez, formerly with the firm of Perkins Coie LLP, Donuts’ outside counsel, has been named Vice President and General Counsel. Alvarez has worked with Donuts since its incorporation in 2010 and on domain industry matters since 2007.
Stella Luu was appointed, as Research Associate, responsible for industry research and analysis. A graduate in Physics from the University of Washington, Luu’s previous experience includes positions with the law firm of Saalfeld Griggs and the University of Washington’s General Clinical Research Center.
In a WSJ interview, the company revealed that they currently have 8 full-time employees total and plan to further expand the team to 25 in the next 12 month’s.
Demand Media Partnership
Donuts will be working with Demand Media Europe Limited, a wholly-owned subsidiary of Demand Media, , as its registry services provider, based on its superior technology solution, support structure and overall ability to meet Donuts’ requirements.
“Donuts has developed a well-considered and strategic approach for expansion of the namespace,” said Taryn Naidu, Executive Vice President of Demand Media. “We have built a strong partnership with the Donuts team and believe by working together, we can most effectively help end-users and deliver on the promise of ICANN’s new gTLD program.”
Donuts Chief Operating Officer Richard Tindal added: “We are confident in Demand Media’s technical capability and count them as a valued partner. Their commitment to operational security and stability backs the assurances we’ve given to our investors and the marketplace.”
Donuts is headquartered in Bellevue, Washington, with offices in Los Angeles, California and Washington, D.C. The company was founded in late 2010.
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