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Donuts makes weird investment in startup

Kevin Murphy, May 4, 2016, 10:04:18 (UTC), Domain Registries

Donuts has made a surprising investment in a company that makes geolocation technologies.

The new gTLD registry operator announced yesterday that it has something called Donuts Labs, through which it will make “strategic investments” in “similar” companies.

Its first investment is in California tech startup GeoFrenzy, which operates in the emerging “geofences” space.

A geofence is a virtual perimeter around a defined geographic location.

Basically, GeoFrenzy has divided the world up into square-centimeter chunks and stores data about who owns these chunks in a registry database.

Using the GPS service you’ll find in all modern mobile devices, apps using the technology can figure out when you walk into or out of a registered, fenced-off area, triggering some behavior.

Such services are believed to have applications ranging from logistics to advertising. One example on the GeoFrenzy web site says that its database and software could be used to keep drones out of restricted airspace.

The terms of the deal with were not disclosed, but it’s surprising news for a couple of reasons.

First, Donuts appears to have cash to throw around on pet side-projects at a time when one would assume, as an early-stage company itself, it would be more focused on growing its fledgling new gTLD business.

Second, the press release makes out that there are technology synergies between the companies.

GeoFrenzy CEO Sean Eilers is quoted as saying: “Their expertise in managing a highly scalable registry and their experience with innovative DNS technologies makes Donuts an ideal fit as an investor and strategic partner.”

But to the best of my knowledge Donuts doesn’t have any experience managing a highly scalable registry. It outsources all of that kind of thing to Rightside, doesn’t it?

Donuts says it will be making more, similar investments in future.

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