Bluesky Raises $8 Million in Seed Funding and Introduces Paid Service for Custom Domains

Bluesky Secures Funding and Introduces Paid Service Ahead of Meta’s Threads Launch

Hours before Meta launches its anticipated Instagram competitor, Threads, another Twitter rival — Bluesky — is announcing additional funding and its first paid service. In a blog post on Wednesday, the company shared that it raised seed funds totaling $8 million this summer, when it converted from being a public benefit LLC to a public benefit C Corp. In addition, Bluesky will now offer a paid service that provides custom domains for end users who want to have a unique domain as their handle on the service.

The decentralized social network protocol Bluesky has been developing is an alternative to ActivityPub — the protocol powering yet another decentralized Twitter rival, Mastodon, and soon, Meta’s Threads app.

Expanding the Team and Growing the Bluesky App

Bluesky’s seed round was led by Neo, a community-led firm with partners like Code.org co-founder Ali Partovi and former Twitter PM Suzanne Xie, the company noted in its announcement. Joining the round were various angel investors, including Joe Beda (co-creator of Kubernetes), Bob Young of Red Hat, Amjad Masad of Replit, Amir Shevat, Heather Meeker, Jeromy Johnson, Automattic, Protocol Labs, Sarah Drasner, Katelyn Donnelly, Ali Evans, Stav Erez, Kris Nóva, Brad Fitzpatrick, Abdul Ly, and others.

The funds will be used to expand Bluesky’s team, manage operations and infrastructure costs, and grow the AT Protocol powering the Bluesky app.

Seeking New Revenue Streams

With the funding, Bluesky is also committing to finding a path forward to generate revenue, noting in the blog post that it will 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’s business model must be fundamentally different — we are a public social network and our code is all open source, so we have no ‘moat’ when it comes to data,” the announcement states. “We 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 couldn’t be our dominant business model,” it adds.

Custom Domains: The First Paid Service Offered by Bluesky

The first of Bluesky’s paid services will be custom domains, which are being offered in partnership with the popular domain registrar Namecheap.

Ahead of this, Bluesky had already offered the ability for users to set a custom domain as their handle and so far, over 13,000 of its 100,000+ users have done so. However, the current solution requires users to have familiarity with domain registrars and DNS settings. The new paid service will simplify the process by allowing users to set up a custom domain in minutes, the post explains.

In a separate but related announcement, Bluesky shares more about how the Namecheap paid service will work — by allowing users to pick out a domain name of their choosing and then link it to their Bluesky account. The company didn’t disclose the terms of its partnership with Namecheap, but this would likely be some sort of rev share agreement on the domain name purchases.

Looking Ahead: Future Services and Innovations

Bluesky says in its blog post and in a related series of posts to Bluesky itself that it will explore other services it can bundle for users in the future, but didn’t hint as to what those may be.

In recent days, the company has been expanding its feature set and policies, with the introduction of custom feeds and new moderation guidelines, and it shared its ideas around moderation and safety for wider public feedback.

These concepts came after the company faced criticism from some members of its community over its approach to decentralization and moderation, which didn’t see it cracking down hard enough on hate speech — a complaint that could drive some users away from the app and toward other solutions, including, possibly, Threads.

of Bluesky’s Funding and Paid Service Announcement

As Meta prepares to launch its Instagram competitor, Threads, another Twitter rival, Bluesky, is making headlines with additional funding and the introduction of its first paid service. In a recent blog post, Bluesky revealed that it raised $8 million in seed funds, converting from a public benefit LLC to a public benefit C Corp. The company has also unveiled a paid service offering custom domains for end users who desire a unique domain as their handle on the platform.

Leading Bluesky’s seed round is Neo, a community-led firm that boasts partners such as Ali Partovi (co-founder of Code.org) and Suzanne Xie (former Twitter PM). The investment round also attracted a range of angel investors, including Joe Beda (co-creator of Kubernetes), Bob Young (Red Hat), Amjad Masad (Replit), and more.

The raised funds will support Bluesky’s expansion plans, team growth, operational needs, and the development of its AT Protocol, which powers the Bluesky app. Beyond securing funding, Bluesky is actively seeking innovative strategies and services to generate revenue. In a commitment to building a sustainable social network, the company aims to identify offerings that deliver genuine value to its users.

Bluesky’s revenue model sets it apart from traditional social media platforms that rely heavily on advertising. As a public social network with open-source code, Bluesky prioritizes user data ownership and freedom to switch platforms. To kickstart its revenue streams, Bluesky will launch custom domains as its first paid service. Teaming up with domain registrar Namecheap, Bluesky has already allowed users to set custom domains as their handles, with over 13,000 users adopting this feature. The new paid service removes the complexities associated with domain registrars and DNS settings, enabling users to establish a custom domain in just minutes.

In a related announcement, Bluesky sheds more light on its partnership with Namecheap. Users will have the opportunity to choose a domain name and link it to their Bluesky account, although specific terms of the partnership weren’t disclosed.

Looking ahead, Bluesky plans to explore additional services it can offer its users, although details remain undisclosed. The company has recently expanded its feature set by introducing custom feeds and new moderation guidelines. Open to public feedback, Bluesky aims to address concerns regarding decentralization and moderation, particularly with regard to hate speech.

With its funding news and the introduction of a paid service, Bluesky is making significant strides in its quest to become a leading decentralized social network provider. As Meta’s Threads app launch approaches, all eyes will be on how Bluesky’s unique offerings and commitment to user data ownership will impact the social media landscape.

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