Long before I knew Kyle York, I was a DynDNS user. If you were part of the early DevOps crowd, you probably were too. So when our mutual friend Brian Brady offered to connect us, I came in with a long list of questions about how a free dynamic DNS service became infrastructure that some of the biggest sites on the internet depended on.
Kyle joined Dyn as chief revenue officer to take the company into the enterprise. Eight years later it was doing $100 million in ARR, and Oracle acquired it in a deal reported at around $600 million. Today he’s co-founder, CEO, and managing partner of York IE, the Manchester, New Hampshire firm he started in 2019 with fellow Dyn alums Joe Raczka and Adam Coughlin.
Summary
- How a project born in a college dorm room ended up powering household-name websites
- The board meeting that turned a long-shot sale process into a real one
- Kyle’s playbook for deciding what to buy and what to sell
- His first angel check, and where it ended up a decade later
- A 2015 pitch deck that sat on ice for four years
- The engine York IE built that keeps deal flow coming in
Watch the full conversation below, or keep reading for the highlights 👇
Selling to Oracle Without a Banker
Dyn started in a dorm room at Worcester Polytechnic Institute as a way for home users to reach their own computers, files, or cameras through dynamic DNS, even as their ISP kept changing their IP address.
Kyle came aboard when the team saw the managed hosting and cloud wave building and realized DNS could be sold to businesses as a traffic management, security, and performance product. Dyn bootstrapped to $30 million in ARR before taking outside money and eventually raised $100 million of funding. Over Kyle’s run, ARR went from roughly $2 to $3 million to $100 million, with customers like Netflix, Twitter, Bank of America, Wells Fargo, and Chase.
“Anybody who relied on their website or application to run their business probably leveraged a Dyn capability or service along that run.”
Around the $100 million ARR mark, the major cloud platforms started launching competing DNS services at half or a tenth of Dyn’s price. For them, DNS was one feature among many, and the real goal was selling more compute, storage, and networking. Kyle went to the board and suggested testing the market. He remembers the response as something close to “yeah, sure, buddy, go see if anyone listens.”
“When I rolled back and said, I’ve got 10 interested parties and they all want to have discussions, and a handful are looking for in-person meetings and one or two are looking to move very fast… the board took notice.”
Kyle and Joe Raczka ran the process themselves. Kyle brought the enterprise sales and partnership relationships. Joe, who had been Dyn’s first VP of FP&A before moving into corporate development, was the deal guy. Oracle was already a strategic partner and client, and once it decided to buy, Kyle says it moved fast.
After the term sheet with Oracle was executed, the board signed Goldman Sachs at a heavily discounted fee. Oracle would be working with Goldman for years to come and might never deal with Dyn again, so having Goldman on the deal protected against a retrade late in the process. Kyle calls it “a smart insurance policy.”
Kyle’s M&A Playbook at Dyn
Over its run, Dyn acquired 11 assets, ranging from a $50K IP purchase to a $30 million acquisition, and divested four product lines, including an email backup product and an SSL business.
Once Dyn had established leadership in managed DNS and traffic management, its deals fell into three buckets:
- Consolidation. Smaller players like EveryDNS, EditDNS, TZO, and Nettica had built good products in the DynDNS mold but couldn’t crack the B2B motion. As Dyn became the employer of choice in the space, their teams wanted in.
- Adjacency. SendLabs brought email delivery, which meant capturing far more traffic on the infrastructure side than they could with DNS alone.
- Divestiture. Some organically built products were subscale, and Dyn didn’t have a right to win with them. To another company, though, they could be far more strategic. Every divestiture came with a bilateral strategic partnership attached.
All three only worked because Dyn had become the platform of choice in its corner of the market, even for people building competing products.
“We are maniacally focused at being the world’s best, albeit niche, infrastructure company in DNS.”
From First Angel Check to “Operation Little League”
Kyle’s angel investing grew out of his day job. As CRO, he’d get pulled into strategic deals with the largest prospects in Dyn’s pipeline, a mix of enterprise brands and startups nobody had heard of that somehow pushed enormous amounts of DNS traffic. Those conversations kept turning toward scaling, and founders started asking for advice and checks.
One of those companies was Catchpoint, a web performance monitoring startup launched by a team that came out of DoubleClick. They wanted go-to-market help and smart angel money. Kyle wrote a check of almost $50,000, a big number for someone investing out of W-2 income at the time. Catchpoint was acquired for a reported $250 million by LogicMonitor late last year.
Sixty-five angel investments followed. Kyle admits to a few strays (a hot sauce company, some NFTs, a shoe company), but the vast majority were B2B software and SaaS. It struck Kyle early on that many early-stage VCs had never run a company, and very few operators were writing checks with the kind of throughput he had.
“Value add smart money. Don’t just say that, be that, do that.”
He started pooling capital with Joe, Adam, and other partners. That turned into angel syndicates and rolling SPV vehicles for the deals where he had unique access.
The real starting point for York IE came in 2015, near the end of the Dyn run. Kyle, Joe, and Adam put together a pitch deck called Operation Little League, which Kyle describes as Accenture meets Sequoia for private early-stage investing, advising, and support. It went on ice when the Oracle deal happened, since Kyle was the named key man. He ended up staying three years helping build Oracle’s cloud, then pulled the ripcord in 2019.
How York IE Invests Today
York IE runs two funds. The first is a rolling pre-seed and seed vehicle that LPs and angels can roll on and off of over time. It focuses on vertical AI companies in industries where AI and software can accelerate the top line and drive efficiency, generally under $1 to $1.5 million in ARR. Checks run from $500K up to $1.5 or $2 million. The firm does about 15 seed deals a year and has built a portfolio of roughly 75 companies.
The second is an early growth fund, which Kyle describes as Series A with growth equity characteristics. These are vertical AI businesses doing $2 to $8 million in ARR and raising $5 to $15 million. They’re capital efficient, they don’t need a monster round, and the founders bring distinguished founder-market fit.
Beyond the operator pedigree, Kyle points to the 300-plus person, AI-native operating platform York IE has built. It supports private technology companies across R&D, go-to-market, and G&A, and it isn’t limited to the York IE portfolio. The firm partners with funds from Battery and General Atlantic down to seed-stage firms, acting as an extension of their value creation teams.
“It ends up being an incredible mousetrap or flywheel for deal flow.”
There’s more in the full conversation, including what it was like to fold a 450-person Dyn into a 300-person Oracle cloud team, Kyle’s meetings with Larry Ellison in the Oracle boardroom and at his Pacific Heights home, and the lunch at the Wild Rover where Brian Brady asked Kyle a very direct question before he’d even started at Dyn. Watch it above.
