Decentralized social media Twitter-like Platform, Bluesky, which was conceptualized by former Twitter CEO Jack Dorsey, has announced that it has raised $8.8 million in a seed round.
This is followed by a launch of its paid service that will provide custom domains for end users who want to have a unique domain as their handle on the platform.
The seed round was led by Neo, a community-led firm with notable partners such as Ali Partovi, co-founder of Code.org, and former Twitter PM Suzanne Xie.
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The round also included investments from various angel investors, which include Amjad Masad of Replit, Joe Beda (co-creator of Kubernetes), Bob Young of Red Hat, Brad Fitzpatrick, Katelyn Donnelly, Ali Evans, Stav, Erez, and several others.
With the funds raised, Bluesky plans to expand its team, handle operational and infrastructure expenses, as well as develop the AT Protocol used by the app.
The company wrote via a blog post,
“Last fall, we started building our client app to drive the adoption and development of the AT Protocol. This summer, we converted from a public benefit LLC to a public benefit C Corp to gain more independence from the legacy of the past. Our mission and board have stayed the same, but along with this conversion, we’ve raised funding from an array of values-aligned investors who share our vision for an open and decentralized commons for public conversation.
“Our goal for this raise was to find new partners and to give ourselves room to grow the network and experiment with new business models. With this funding, we can expand our team, manage increasing operation and infrastructure costs, and grow the AT Protocol ecosystem as well as the Bluesky app.
“It’s a lot to tackle at once, but we’re excited to have seasoned allies who want to help us realize our vision of an open commons for public conversation. Just as we’ve made the source code for the protocol and the client public, we also want to be transparent about our business plans. We’ll be experimenting with different strategies and services to see what provides real value to our users, and will continue to share what we learn as we build a sustainable social network”.
Bluesky has disclosed that its business model will not be like the regular social media apps, rather, it will be fundamentally different in the sense that it will run a public social network and all its code will be open source.
The platform has set out to build a protocol where users can own their data and always have the freedom to leave, and this approach means that advertising won’t be its dominant business model. Therefore, the app has been exploring other avenues of monetization.
Bluesky believes that there must be better strategies to sustain social networks that don’t require selling user data for ads. Its first step in another direction is paid services, and it is starting with custom domains. While setting up a custom domain to use with Bluesky and the AT Protocol is fairly straightforward, it does require some familiarity with domain registrars and DNS settings.
The company has therefore partnered with Namecheap, a popular domain registrar, to offer a service for easy domain purchasing and management. With this, people can set a custom domain as their handle on Bluesky and the AT Protocol in under a few minutes.
Of the domain registrars, Namecheap has one of the best reputations for defending their users against unauthorized domain transfers and protecting their domain names.
Notably, Bluesky has been dubbed as a viable Twitter rival. The app which is still in the Beta phase has continued to amass thousands of users on its waitlist. In April 2023, it was reported that it had 35,000 users and 1.2 million people on the waiting list.
Just recently, the app disclosed it experienced a high rate of sign-ups following Twitter CEO Elon Musk’s introduction of limits to users’ tweet engagements.
This saw the Twitter-like app witnessa high influx of users on its platform on Saturday after Musk wrote via a tweet that “due to extreme levels of data scraping and system manipulation, verified accounts, unverified accounts, and the new unverified accounts will be subject to different limits on the social media site”.
Several experts have described Bluesky as a potential Twitter replacement, since Elon Musk’s takeover of the social media app, with his incessant revamps on Twitter that have seen several users search for alternative platforms.