2022 turned out to be a mixed bag for a lot of companies involved in the buying and selling domains. The common thread was a strong first half, followed by a second half slowdown brought on by a variety of challenges in the global economy that we have talked about at length. That certainly seems to have been the case at Escrow.com who has released their 4Q-2022 Domain Investment Index Report (.pdf rule).

The company reported that their total revenue in Q4-2022 plunged to $80 million after coming in at almost twice that - $158 million - in the same quarter the year before. Over 75% of that decrease came from a plunge in the volume of domain name transactions that Escrow.com handled. Despite the slowdown in 4Q, Escrow.com still had a profitable 2022 after booking $411 million in revenue for the year (down 20% from

the $514 million taken in for all of 2021). A couple of the key factors Escrow.com cited was a 35% drop in global venture capital funding in 2022 and a corresponding slowdown in the number of sales made at the ultra high end of the market where prices can reach eight figures for one domain.

The good news is that a solid rebound appears to be underway in this new year. In our bi-weekly domain sales reports we have been commenting on the strength we saw in aftermarket sales in January and February. Escrow.com is apparently seeing the same thing as they reported, "February 2023 is shaping up to be the best month since July 2022, possibly June 2022, and we are fairly confident that Gross Payment Volume in 1Q-2023 will be higher than 4Q-22." 

Still there is plenty of ground left to retrace as volume at the company has yet to fully return to the lofty heights reached in 2021 and early 2022. No surprise given that a lot of the economic challenges we mentioned appear to remain a long way from resolution. Even so, seeing the market respond as well as it has against those headwinds in the early going this year is very encouraging in our view.

(Posted March 3, 2023)  

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