Rockstart alumni Undeveloped: From idea to exit in three years
Meet Rockstart’s alumni Undeveloped, which has just announced that it has been acquired by American company Epik.com, one of the top players on the domain names market. Part of the 2015 Web and Mobile batch, the startup was founded by Reza Sardeha, his brother Ali Sardeha, and Dominic Matheron—originally from Iran and France. Undeveloped is a domain marketplace that simplifies access to all domain names and safely connects the owner to the buyer.
Undeveloped joined Rockstart with the vision of making the market more transparent and accessible. We sat down with one of Undeveloped’s founders Reza Sardeha, who spoke to us about the acquisition and shared his insights about the struggles, the rewards, and everything in between.
Six months ago, Undeveloped received the first unsolicited offer from Epik.com. The startup wasn’t interested to sell, though.
“We kept rejecting their offer as we didn’t think it was the right time for an acquisition,” Reza recalled. “However, we kept in touch with their CEO and spoke weekly, sharing our vision and ambitions. At some point we realised the synergy between us and Epik was very clear. By making this big step in joining Epik’s global holding, while remaining completely independent in terms of operations post acquisition, would be an extremely profitable step to take. We realised that we could actually accelerate our growth dramatically by gaining access to Epik’s core technology and resources that we could use instantly, instead of taking two years to build it ourselves.”
Reza also underlined the gravity the acquirer’s international reach has for Undeveloped, simply due to their customer base. The sides were in sync as to where the market is heading and which specific direction both companies see themselves moving towards. By combining the two, they could build the ultimate liquid marketplace for digital brands.
“There were so many clear benefits of joining them that we eventually dropped the biggest issue that we were having when going for an acquisition,” Reza said. “At some point it really felt good and we went full frontal and agreed to a win-win deal in a very short time.”
Coming up with an innovative business model that is sustainable as well as profitable is likely the most challenging obstacle to overcome for any budding startup or business. Obtaining the actual domain name doesn’t seem like a very difficult process after that. However, most people are unaware that the person who owns the domain name, effectively owns the trademark of that name, if it wasn’t registered earlier. This development in the domain industry makes domain names extremely valuable assets for the coming future, since whoever owns a specific name, also owns that complete brand.
“You can’t simply go to a domain registrar and claim a brand, they’re all gone already,” Reza said. “What people don’t even realize is that they are not even in the hands of professional domain investors. Often the owners are people who used to have a business, or maybe the business didn’t go well, which means that all these names are now unused and scattered all over the place.”
This is also where the idea for the name Undeveloped came from. It stands for the core commodity that is traded—domain names that are unused and undeveloped. Reza compares these domain names to pieces of land scattered around that have to be developed.
Recently Undeveloped made a slight pivot into becoming a marketplace for digital brands.
“We’re living in a world where every part of the startup infrastructure is becoming instantly deployable,” said Reza. “Deploying servers is cheap and instant. Billing, support, and payrolling is SaaS. How about your brand? Imagine your company could get a complete brand for a fixed monthly fee that is instantly deployable. Hassle free, risk free, and flexible. That’s what we’re building next.”
Although Undeveloped’s success rate is high, its journey has by no means been undemanding.
“The most challenging aspect was that from day one we knew we positioned ourselves in a market that was already fully developed,” Reza said y. “The domain industry already exists since the conception of the internet, so we knew that they were already very fierce and strong competitors out there. It is considered common knowledge that if there is already a strong marketplace, it’s very hard to intrude and become a successful part of it. That’s why you see a lot of investors investing in original marketplaces, positioning themselves in new markets which don’t exist yet, throwing a lot of capital at them to become the biggest in a short period of time. This was our most challenging struggle. We had to figure out how to position ourselves within an already advanced market with very limited means from day one”.
Two and a half years ago, Undeveloped started with an investment of €200 and had no more than a landing page. In 2015, it joined Rockstart’s Web and Mobile program and consequently raised a seed round, but mostly funded its growth with its own revenue.
The teachings of the lean startup are unavoidable. Some of these are to keep pivoting, keep changing, and to be flexible. While these are important guidelines, Reza emphasized that what really enabled him and his team to be successful was perseverance.
“If we didn’t have a very strong and dedicated vision of what we believed in and the things that we wanted to accomplish in this market, I’m not sure if we would have overcome all problems and issues we bumped into in our journey. It hasn’t been an easy ride but we made it,” Reza concluded.
Going through all this hardship and persevering in spite of them is the reason why Undeveloped is able to reach this point in it’s life cycle. The startup’s passionate and entrepreneurial team can now reap the benefits of an acquisition, joining the list of Rockstart alumni that have gone through the full circle—from founding a company to being acquired.
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