Element raises $30M as Matrix explodes!

July 27, 2021
investment

The world has truly woken up to the age of decentralised communication. The US congress is releasing the ACCESS Act bill to enforce interoperability and data portability between platforms; the EU is pushing forwards with the Digital Markets Act for the same - and the German national healthcare system has published its plan to standardise 150,000 healthcare organisations on Matrix.

It’s against this backdrop that we are incredibly excited to announce that Element has raised $30M of Series B funding in order to revolutionise the app’s usability, build out major new features, expand in the enterprise market and take Matrix fully mainstream!

The round is led by our long-standing friends at Protocol Labs (the creators of libp2p, IPFS, Filecoin and more) alongside Metaplanet - the investment fund set up by Jaan Tallinn, co-founder of Skype. Automattic and Notion are also participating in the round, doubling down on their existing investments in Element.

Mission driven investors

We cannot think of better new investors to support Element’s mission than Protocol Labs and Metaplanet. Protocol Labs is unquestionably a leader of the decentralisation movement: they have been busy building out IPFS as the decentralised storage layer of the Internet for as long as we’ve been working away on Matrix as the decentralised communication layer. They’ve been on Matrix since before Element was born (Vector was one of the first apps entirely hosted on IPFS!), and we cannot wait to work more closely with them in future, although technology will only be shared if it is clearly the right technical decision for us - for instance, Element (and Matrix) is not going to use cryptocurrency incentives any time soon.

Meanwhile, Metaplanet is one of the most forward thinking investment funds out there - they’re not joking when they say that their investment thesis is to “support novel and evidence based innovation that could produce an outsized return for the benefit of humankind”.  In other words, they invest in folks who are doing crazy disruptive long-term things to make the world a better place - in our case, democratising communication to make private communication a basic human right for all.  Beyond that, there’s also the obvious massive overlap between Jaan’s experiences building out Skype (where he was responsible for chat!) and our quest with Matrix.  Many people forget that Skype was originally a massive and successful decentralised communications app - and in fact fully peer-to-peer, built on the same tech as Kazaa. It will be fantastic to learn from the lessons of building Skype as P2P Matrix work progresses.

The investment is also a very concrete reflection of Matrix and Element’s progress and maturity, and an increasingly privacy conscious market.  

Element and Matrix are exploding!

These last six months alone have seen us gain real traction in the enterprise market with the launch of bridges for Slack and Teams (and Telegram and Discord) on EMS - with more to come shortly.  At the same time, Element Home is proving popular for friends and family wanting their own servers.  Meanwhile in the wider Matrix world we saw the world’s biggest open source conference FOSDEM go virtual via Matrix (with over 30K attendees across 660+ talks), inspiring many other open source projects to hop on board.  Finally, the beta release of Spaces has gone down a storm - at last letting users curate their rooms into groups and even hierarchies, and soon to exit beta!

In the public sector, more and more governments and NGOs (hopefully to be announced soon!) are joining the UK, the US, France and Germany in building on Matrix. Only last week we saw gematik, the German national health agency announce all of Germany's healthcare will use Matrix for messaging going forwards. The private sector is catching up too, realising that handing over all their unencrypted conversations to Microsoft and Salesforce (Slack) may not be the best move.  Elsewhere, we see more and more users realising that Element is an excellent secure alternative to Discord - or a decentralised alternative to WhatsApp.

Speaking candidly, as a company, Element could be self-sufficient at this point if we wanted to, funding basic Matrix and Element development via revenue from EMS hosting, EMS services, and support contracts for nation-scale deployments such as France and Germany. The public network now has over 35M addressable users spread over ~70K deployments, and we’re working with over 10 other countries to bring them on board too. Matrix is here to stay.

The need for speed

However, between the pandemic, the reactions to WhatsApp’s privacy policy changes, and the fact even regulators now realise how unhealthy these platform monopolies are: it’s become clear over the last 18 months that secure decentralised communication has become an existential requirement, and we should do everything we can to speed up our remaining work.  Quite simply, the world needs Matrix now.  Running a Matrix server should be as straightforward and as commonplace as running a web server. Element should be so delightful to use that it drives Matrix adoption to gain critical mass and explode virally.

So we consciously made the decision to proactively raise this new funding in order to accelerate Element’s growth, and bring data sovereignty to the masses as quickly as we possibly can.

Practically speaking, this means doubling down on our core work: making Element as polished and slick as possible - bringing in more designers and product usability specialists to help dig us out of the remaining holes in the app; adding the remaining core missing features: spaces, threading, pinned messages, starred messages, custom emoji and more. On the Matrix side, making the Synapse server a joy to run, and continuing development on Dendrite, the next-gen server.  We are also filling out dedicated teams to focus exclusively on refining our End-to-end Encryption, VoIP / VR, Trust & Safety and P2P initiatives.

In short, for both Element and Matrix, we’re hiring across the board - so if you want to build the missing communication layer of the Web, please get in touch!

Four years and beyond

It’s a bit dizzying to see how far Matrix has come since we set up Element in July 2017, and yet it almost feels like we are still at the beginning.  We’re at the cusp of Element uncontrollably exploding across our computers and phones in much the same manner that Netscape once did in the early days of the Web - or email did over the early Internet.  It’s not implausible to think of a world where all servers come with a Matrix homeserver by default, much as they come with a mail transfer agent today - or a peer-to-peer world where every copy of Element embeds its own server: giving the user total digital sovereignty over their conversations.

The coming months will prove critical as we transform towards this brave new world. The new funds will be spent on taking Element's polish to the next level - while fully funding P2P Matrix work, Decentralised VoIP/Video conferencing and Decentralised Reputation at last. This should be a step change for Matrix and for Element, and we’d like to thank Protocol Labs, Metaplanet, Automattic and Notion for providing the fuel to power it!

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