There was a large number of domains purchased by startups in early to mid-2021, and that has provided a large amount of data even before the year has fully ended. This provides a wealth of data to see how VC-backed startups are viewing domain branding post-2020.
Some interesting new data points are emerging in this year’s data and they’re not only interesting for this report but also when looked at in comparison with the information from the previous years.
Here’s what we will cover in this analysis:
- Raw data of funded startups
- Major insights from analysis
- Takeaways for domain investors
Now let’s get into it!
Raw Data of 2021 Funded Startups
3 Major Insights From Domains Used By VC Startups
The 2021 numbers brought plenty of information to sort through as there were thousands of startups with public data. This level of information gives extra weight to any potential emerging trends, shifting trends, or other changes taking place in the domain market.
How did we pull insights from this mountain of data?
Our approach was as follows. We obtained the data of funded startups from Crunchbase and cross-correlated that to their domain names. We analyzed the raw data using Microsoft Excel and created data-driven charts to pull insights.
Let’s jump into the major insights that have popped up from the data.
1. Most Common TLDs Used By Startups
In 2021 over 62% of funded startups went with a .com domain. Again, proving that .com is going to be the undisputed king of TLDs for the foreseeable future. This confirms what most domain investors have believed, and what several years of statistics have shown up to this point.
348, or roughly 11% of startups, are using .io and .co domains. These are back to being grouped together in the number two spot. Although .io extensions were still picked more often than .co, the gap between the two that appeared in 2019’s data has closed a bit.
This will still be worth paying attention to, especially with the .AI domain extension gaining so much popularity. More and more startups are using the .AI domain extension with a total of 134 going this route in 2021, just barely behind .co
With the massive advancements in Artificial Intelligence, it will be interesting to see if this is a long-term trend or a short-term opportunity for making money off the right domains.
2. Number of Words in a Startup Domain Name
The trend to short memorable names not only remains but continues to gain an even larger percentage of the pie compared to longer multi-word domain names. In 2021 over 74% (2,330) of all purchased domains were a single word.
The second most common length was 2-word domains, which 724 startups (or 23%) went with. That means over 97% of all domains purchased by VC-backed startups were only one or two words in length.
This strongly supports the previous trend of shorter and more memorable being better. While this trend was also high, the percentages keep moving in this direction as domain names with 3 words or more in the domain continue to see less and less use.
Note that only 9 domain names were four words or more. That is less than ⅓ of 1% of all domain names purchased by startups in 2021. This definitely seems to indicate that the longer detailed names are not coming back.
Buying multi-word domain names in hopes of selling them is a losing proposition in 2021. The days of exact match domain names being popular are gone, especially among brand-focused startups.
This also suggests that good .co, .io, and .ai domains are likely a better investment than .com domains of 3 words or more based on current trends.
3. How Many Characters In Startup Domains?
The number of characters in a startup domain name can give some interesting data to look at. The majority of domains have 6 to 10 characters in the domain. This is the clear sweet spot for domain name length.
The sweet spot was 6-9 characters the two years previous, though it was 6-10 characters the two years before that. This shows that while the exact sweet spot might shift a little, 6-9 is always a consistent sweet spot.
Ten character domain names are also safe as it is almost always the next highest number outside of the most popular sweet spot. Five characters and eleven characters shouldn’t scare a domain investor off the right name although they’re not quite as popular as the other options.
This data also seems to confirm that the temporary jump of 5-character domains over 10-character names was a one-year (2019) blip and not the beginning of a new trend.
Final Takeaways for Domain Investors
The startup community is still going strong. This information came from over 3,000 brands and showed some new trends emerging while putting a pretty solid conclusion on some older trends or beliefs in domain investment that are no longer relevant.