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Billion Dollar Unicorns: GoDaddy Shying Away from IPO, Yet Again

Posted on Wednesday, Feb 11th 2015

Another Billion Dollar Unicorn club company is GoDaddy, which has made its place in the Internet domain marketplace by focusing on small businesses, professionals, and individuals. The company is nearly as old as the Internet itself and has come a long way since, but financials remain dodgy, leaving the market unimpressed.

GoDaddy’s Offerings

Scottsdale, Arizona-based GoDaddy was founded in 1997 by Bob Parsons, a US Marine Corps veteran and a serial entrepreneur. Bob had sold off his earlier venture, a financial software services firm called Parsons Technology Inc. to Intuit and then set up shop with Jomax Technologies. Two years later, Jomax was renamed GoDaddy. GoDaddy’s goal was to provide small businesses, professionals, and entrepreneurs with the ability to build online ventures. Their tools provide their customers with access to digital real estate that ties into the objectives of the customer.

GoDaddy provides website building, hosting, and security tools and simplifies the process of building and protecting their customer’s online presence. Their customers also have access to a 24×7 customer care center for their digital domain issues. Today, GoDaddy operates the world’s largest domain marketplace and manages more than 59 million domains for more than 12 million customers worldwide.

GoDaddy operates in a rapidly growing market. According to a study conducted by Beall Research, more than 50% of small businesses in the US still did not have a website. With rising mobile proliferation, there is a need for businesses to maintain an online presence, thus expanding the market opportunity for GoDaddy.

GoDaddy’s Financials

GoDaddy earns revenues by charging their customers a monthly fee for the services offered. Prices start as low as $1 per month for a suite that includes domain, website, and email capabilities. Other prices of products and services are available à la carte, based on the nature of the service bought. For instance, a basic website for a business with 10 GB disk space and 500 GB bandwidth is available for $9.99 a month while a premium one which features 50 GB disk space, 1000 GB bandwidth, a mobile site, SSL certificate, and SEO capabilities is priced at $14.99 a month.

GoDaddy’s revenues have seen strong growth in recent years. For the year ended December 2013, revenues increased from $910.9 million a year ago to $1.13 billion. Domain revenues were the biggest contributor with $671.5 million recorded for the year. Hosting and presence revenues contributed $380.7 million and business application revenues brought in the remaining $78.6 million.

Despite the age of the business and the strong customer growth rate, GoDaddy remains a loss-making business. Losses have, however, narrowed from $1.11 per share in 2012 to $0.79 per share for the year ended December 2013. For the first nine months of 2014, revenues increased from $825 million to $1.02 billion and net loss reduced $134 million to $116 million.

GoDaddy has been privately held and their funding details are not available. Their investors include KKR, Silver Lake, and Technology Crossover Ventures (TCV) who are estimated to have spent $2.25 billion in 2011 to buy a majority stake in the company. KKR and Silver Lake hold 28% of the company each and TCV holds 12% stake.

Last June, GoDaddy filed their S1 as they planned to raise $100 million in an IPO valuing them at $4.5 billion. But those plans have been delayed for now. GoDaddy has not committed to a timeline for their IPO, but analysts expect the company to list early this year. GoDaddy had planned for an IPO back in 2006 as well, but then had cancelled the plans as they did not get the pricing they were aiming for.

More investigation and analysis of Unicorn companies can be found in my latest Entrepreneur Journeys book, Billion Dollar Unicorns. Unicorns will also be discussed with some special guests during our 1M/1M Roundtable programs  over the next few weeks. To be a part of the conversation, please register here. The term Unicorn was coined in a TechCrunch article by Aileen Lee of Cowboy Ventures.

This segment is a part in the series : Billion Dollar Unicorns


. How Marketo Is Faring In The Public Market
. Workday's Ramp to Multi-Billion Valuation
. Gaurav Dhillon, Founder of Informatica and SnapLogic (Part 1)
. ServiceNow's Expanding Market Opportunity
. Gaurav Dhillon, Founder of Informatica and SnapLogic (Part 2)
. Gaurav Dhillon, Founder of Informatica and SnapLogic (Part 3)
. Gaurav Dhillon, Founder of Informatica and SnapLogic (Part 4)
. Tableau's Valuation Increases to $6 Billion
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. Gaurav Dhillon, Founder of Informatica and SnapLogic (Part 5)
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. Gaurav Dhillon, Founder of Informatica and SnapLogic (Part 7)
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