Element, the UK-based developers of secure collaboration and messaging app for the Matrix protocol, have secured $30 million in Series B funding. The funding round was led by Protocol Labs and Metaplanet, a fund set up Skype co-founder Jaan Tallinn, while existing investors Automattic and Notion also participated, highlighting a broad confidence in the importance of platforms like Matrix and the app ecosystem around them.
A quick favourite with governments
Element, led by co-founders Matthew Hodgson, who serves as CEO and CTO and Amandine Le Pape, who is the COO, was involved in the development of the Matrix protocol. The protocol is open source, allowing anyone to run their own secure messaging and collaboration server, rather than relying on large corporates for their needs. Matthew Hodgson explains to UKTN, “it provides end-to-end encryption for any kind of communication over the Internet. And anybody can participate in it. The global Matrix network has got 35 million users spread over about 76 thousand servers. Some are Raspberry Pi home servers, and some are massive data centre deployments.” Element’s provides the tools for organisations using this, and recently renewed its contract with the French government to provide secure tools for its 5.5 million civil servants.
Element’s early successes have largely been with governments; consumer use is largely among early adopting and privacy-aware users. However, with Germany’s recent decision to mandate Matrix within its healthcare system, that might be about to change.
“The German healthcare opportunity is mind-blowing,” says Hodgson, “it’s almost bigger than the NHS mandating Matrix. The healthcare industry in Germany includes 150 thousand organisations and serves 83 million citizens who will now use the secure chat system. We’ve already had other countries reaching out and asking how the Germans can do it, and can they do it too?”
A rapidly growing secure communication protocol
The Matrix protocol has seen 190% growth in the past year, and with its use in France and Germany, along with interest from other countries, is increasingly being seen as a mainstream option. The investment highlights the breakthrough, confirming that the protocol has its own viable ecosystem. There are already more than 150 apps available, while other startups are offering deployment and consulting solutions to compete with the Matrix units being set up by existing consulting firms.
Part of this growth has been fuelled by the Covid-19 pandemic, which forced many organisations to consider how they manage their secure collaboration for periods of prolonged remote working. But part has also been driven by increased concerns about the security of using big silos for communication. While messaging services like Slack are popular options, that also makes them attractive targets. Matrix servers can be locally managed, making them less prominent for bad actors, and even if breached, data is protected with encryption.
Chiswick-based Element, especially following its most recent investment round, remains firmly at the forefront of the Matrix ecosystem. Backed by a proven track record in France, they plan to use the most recent investment to take full advantage of Matrix’s growth and ensure they retain their leading position in the field.
Planned expansion into the corporate sector
Increasing the workforce will be a key priority. “We’ve almost a hundred people at Element now,” Amandine La Pape told UKTN, “spread between our UK HQ, French office and around 20 other countries. We’re planning to increase that by 50% in the coming months. The magic of working with open source is that you can hire talented people wherever they are.”
The intentional spread has also proven beneficial for Element in the post-Brexit environment, especially as Germany is now a big growth market for them. “German companies won’t want a contract outside the EU,” La Pape explained, “so we were able to leverage our French company — half our initial team was French — and use that from day one to serve EU customers.”
Element intends to use the new capacity to increase their penetration of the corporate sector. “We started with governments because they came to us,” La Pape explained. “Now we are evolving more towards the enterprise audience; companies who don’t want to be beholden to a big corporation so, for example, Wikimedia and Mozilla are using our services.”
As individual concerns about privacy and data sovereignty grow, Element is looking to increase the reach of their app. Already available for individuals, Element will also work on polishing the app to make it an even more attractive alternative for individuals. “Remote communication has become an existential requirement,” Hodgson told us, but where Element stands out is its decentralised structure, making it the only truly secure option. “When you have to find a way to communicate securely that addresses every concern, it narrows down to us.”
Interview by Akansha Srivastava