Sramana Mitra: What scale did you get to with that business before you exited?
Bhavin Turakhia: In the public domain, we exited that business at a valuation of $900 million to this consortium of investors in a public company in China. This happened in August of 2016. It was the third largest ad tech deal ever and one of the largest bootstrapped cash exits globally.
Sramana Mitra: Yes, it’s huge. What revenue level had you reached to get that $900 million valuation.
Bhavin Turakhia: The revenue numbers are still not public, so I can’t give you specifics but the deal size is public. The revenue numbers will probably become public. In China, these transactions go through a two-phase process. Once the whole process is completed and the public company announces it, the revenue numbers will be public at that point.
Sramana Mitra: How did this deal come about? Did they come to you?
Bhavin Turakhia: None of the businesses that we’ve started have been with the intention of any kind of potential exit. Even with this one, I was operating a couple of other businesses. The business is based out of Dubai. A majority of the revenue comes from the US. We’ve been growing extremely rapidly and we have been getting investment offers here and there that we’ve ignored.
In 2015, we received a fairly bonafide serious purchase offer from a company in the US. Both me and Dave thought it was interesting even though we didn’t necessarily want to sell. We appointed an investment banking firm in the US and one in China. We started exploring and did a roadshow. Within two to three months of him starting the process, we’ve received a total of eight offers from companies in the US, Europe, and China.
China was an interesting equation because we built this really amazing technology. The second largest advertising market in the world is China and we had zero revenue from China. You can’t succeed in China, as a company, from outside China. We figured that the offers that came in from China would allow media.net to build out a sizable revenue base in China. It started off with an offer that we got from the US. The one from China looked like the best for everyone involved.
Sramana Mitra: Even though you’re at liberty to disclose the fundamentals, the fundamentals must have been solid enough for you to get eight offers to get to that scale.
Bhavin Turakhia: We were probably one of the few ad tech companies to be extremely profitable, growing at a fairly high year-on-year growth rate.
Sramana Mitra: Great, but you have two more.
Bhavin Turakhia: A bunch more. In 2012, I started a business called Radix. I started in 2011. I set up a small team to create a business plan for it. We spent about a year doing that and then, in 2012, we launched. Radix is a top-level domain registry. We own perpetual global rights to 10 extensions. Those are .online, .website, .tech, .space, .store, .site, .fun, and .press. Worldwide, anybody who wants to register a domain name that ends with any of these, they’re managed by us. That was the business that I started in 2012. I started selling those names. Somewhere around 2015, I was hands off of it. It’s got its own management team.
Sramana Mitra: What is the business model of that? The actual domain names are sold by GoDaddy. What is your business?
Bhavin Turakhia: I’ll give you an analogy. When you want to register a trademark, you might go to a trademark attorney who will check availability of the trademark and prepare your application. The trademark has to actually be registered in a trademark registry, which in most cases is managed by the government. There’s a registry where your attorney will submit the application. The same thing applies to domain names.
You can go to GoDaddy, which is the equivalent of your attorney. GoDaddy will register you domain name for you, prepare your application, and so on and so forth. There’s one registry in the back end for each extension. We manage the registry for those 10 extensions. Every time you’re buying 1mby1m.online, you’re paying them a fee. They’re paying us an annual fee for that domain name.