Element Messaging App Raises $30M - Matrix Protocol

Element Secures $30 Million in Series B Funding to Advance Decentralized Messaging

Following the acquisition of Gitter last year, aimed at expanding its user base and feature set, Element is announcing a new round of funding to fuel its continued growth. The company is poised to invest in enhancing its decentralized messaging application, built on the Matrix protocol.

Funding Details and Strategic Allocation

Element has successfully raised $30 million in a Series B funding round. A portion of these funds will be dedicated to expanding the platform’s technology, specifically to cater to the evolving needs of large organizations currently utilizing its services.

These organizations include the French government, serving approximately 5.5 million civil servants; Dataport, integrating the system into Germany’s education and public administration infrastructure; and BWI, providing the communications system for the German armed forces. Currently, Element has secured engagements with around 10 governmental entities.

Focus on Peer-to-Peer Architecture and Decentralized Services

Matthew Hodgson, CEO and technical co-founder of the Matrix protocol, highlighted that investment will also be directed towards refining the company’s peer-to-peer architecture. The goal is to minimize, and ultimately eliminate, the reliance on centralized servers.

A further key area of development will be the expansion of Element’s decentralized voice and videoconferencing capabilities.

“This will represent a significant leap forward in terms of security,” Hodgson stated.

Deployment Options and Revenue Growth

Element is currently offered as both an on-premise system and a cloud-based platform. Public sector clients generally favor the on-premise option, while private sector customers typically choose the cloud-based service.

Cloud revenues have experienced a substantial 300% growth in the past 12 months. While the company has not disclosed the exact monetary value, this growth underscores Element’s expanding market presence and justifies the decision to seek additional funding.

Investors and Total Funding

This funding round includes investments from Protocol Labs, the open-source R&D lab responsible for libp2p, IPFS, and Filecoin, and Metaplanet, a fund established by Jaan Tallinn, a co-founder of Skype.

Existing investors, including WordPress parent company Automattic and Notion, are also participating in this round.

To date, Element has raised a total of $48 million.

The Matrix Protocol: A Foundation for Decentralized Communication

Matrix, the non-profit protocol underpinning Element, was designed to revolutionize internet communication. It aims to integrate disparate, isolated communication environments into a unified, cohesive platform.

This approach allows entities organizing communications to maintain “ownership” over their data, enhancing security and usability.

Growth of the Matrix Network

The Matrix network itself is experiencing significant growth, with a 190% increase in usage over the last 12 months. Currently, there are 75,000 deployments supporting over 35 million “addressable” users.

These deployments range from small-scale installations on Raspberry Pi devices to large server infrastructures managed by governments.

It’s important to note that the number of “active” users is considerably smaller than the number of “addressable” users. While Matrix and Element cannot monitor user activity due to privacy considerations, Element’s own servers host 1.2 million active users.

Element’s Evolution and Mission

Originally known as Riot, Element emerged as a Slack/Discord alternative, offering a native messaging platform built on Matrix.

Its purpose was to provide a secure and reliable alternative to the few dominant platforms controlling the majority of global messaging data.

“We’ve been developing messaging technology for over 15 years,” explained Amandine Le Pape. “It seemed unacceptable that a handful of companies were controlling and potentially exploiting everyone’s data. Our goal is to empower individuals and organizations with control over their communications – to achieve data sovereignty.”

Addressing a Broader Trend in Technology

Element and Matrix are part of a larger movement within the technology industry, where leaders are re-evaluating fundamental assumptions about how the internet operates.

This movement advocates for a less centralized approach, recognizing the increasing value of data and the critical importance of secure communication channels.

Industry Support and Vision

“Internet communication protocols are now essential for modern society,” stated Juan Benet, CEO of Protocol Labs. “Currently, most messaging occurs through proprietary, centralized platforms that prioritize short-term business interests over user control. Matrix offers a beacon of hope: an open network for secure, decentralized communication, built on sound internet infrastructure principles. Element empowers organizations with control, ownership, and a superior user experience.”

Potential for Expansion and Challenges

While other encrypted messaging platforms like Telegram, Signal, and WhatsApp are gaining traction, Element and Matrix have initially attracted large organizations as early adopters.

However, Matrix’s collaboration with Twitter on its Blue Sky decentralized platform could potentially broaden Element’s user base.

Like other decentralized platforms, end-to-end encryption presents a dual-edged sword. While it enhances security, it can also be exploited for malicious purposes. Matrix is actively exploring solutions to address this challenge without resorting to backdoors.

A Vote for Decentralization

The investment in Element and its growing user base represent a commitment to decentralization, despite the inherent challenges.

“Centralized communication systems are vulnerable to abuse, including propaganda, surveillance, censorship, and more,” said Metaplanet’s Tallinn. “Consumers need protection from surveillance capitalism, and organizations require a secure, neutral communication platform. Matrix is the most advanced platform to provide this essential communication layer.”