The burgeoning Twitter rival, Bluesky, has certainly been stirring the social media pot recently. This week, the company announced its successful seed funding round, raising a stonking $8M over the summer. Alongside this financial triumph, Bluesky has also introduced its first-ever paid service, offering custom domains to its users.
The funding announcement comes at a particularly opportune time. With Meta on the cusp of unveiling Threads, an anticipated Instagram competitor, Bluesky has succeeded in stealing some of the social media limelight. This major financial backing is all set to further catapult the firm’s growth trajectory.
Bluesky’s strategic transformation from a public benefit LLC to a public benefit C Corp this summer was instrumental in securing the seed fund. This funding round, championed by Neo, a community-led firm featuring prominent partners like Code.org co-founder Ali Partovi and former Twitter PM Suzanne Xie, demonstrates Bluesky’s rising influence in the social networking domain.
The list of investors endorsing Bluesky’s vision is nothing short of impressive. Among the roster of high-profile angel investors are Joe Beda, co-creator of Kubernetes, Bob Young from Red Hat, and Amir Shevat, to name just a few.
These freshly-acquired funds are slated for team expansion, handling infrastructure and operational costs, and growing the AT Protocol that fuels the Bluesky app. In a rapidly transforming social media landscape, Bluesky is dedicated to developing a decentralized social network protocol, designed as an alternative to the ActivityPub – the driving force behind Mastodon and the forthcoming Meta’s Threads app.
But this stonking fund isn’t Bluesky’s sole focus. The company is also pledging to forge a revenue generation path, experimenting with various strategies to provide real, meaningful value to its users. A key pillar of this approach involves distancing from the conventional “users become the product” methodology prevalent in free-to-use platforms and exploring alternative, sustainable social networking models.
Bluesky, being an open-source public social network with no data ‘moat’, has set out to provide a user-centric experience. The plan is to ensure that users can own their data and have the freedom to leave, which means that advertising cannot be the company’s main business model.
The first in line of Bluesky’s paid services is offering custom domains, in association with the popular domain registrar, Namecheap. This new service simplifies the process of setting up a custom domain as a user’s handle, making it accessible even to those not familiar with domain registrars and DNS settings.
Bluesky’s new partnership with Namecheap allows users to select a domain name of their choice and link it to their Bluesky account. The company is yet to disclose the terms of its Namecheap partnership but it’s highly plausible that a revenue share agreement on domain name purchases is in play.
The unveiling of Bluesky’s seed funding and first paid service sets a positive precedent for the company’s future growth. As Bluesky continues to explore and introduce more user-focused services, it is indeed a social networking company to keep an eye on. Amidst the hustle and bustle of the social media market, Bluesky’s moves are sending ripples across the industry.