Web3 startup Internxt, valued at $40M aims to compete with Google Drive

Similar to the way Web2 was born, then grew exponentially over a span of 20-plus years, such is the way the new Web3 – which will include the metaverse, cryptocurrencies, blockchain and plenty of augmented reality and other 3D features – is predicted to go. As Web2 saw with Yahoo, Google, Firefox, Amazon, Microsoft, Apple, Facebook and many others, Web3 will need to have many basic anchor platforms upon which many people can rely. 

For context, Web3 refers to the next version of the internet, which will focus on decentralization and user ownership. 

Internxt, born in 2020, announced late last week that it has landed a $40 million valuation, has a hot product and wants to be one of those anchor companies for the new web. The Valencia, Spain-based startup is building distributed internet services designed to compete with those currently provided by Google, Microsoft and Amazon. All Internxt services are designed for Web3, deploying blockchain and end-to-end encryption to safeguard user privacy, founder and CEO Fran Villalba Segarra told VentureBeat.

Web3 applications have become progressively more valued and publicly accessible during the last few years. Internet users are becoming aware of the lack of personal data security afforded by current services. As such, projects such as Brave, Signal, DuckDuckGo, Ethereum and Internxt are gaining popularity and support, Segarra said.  

Millions of users are now seeking alternatives to platforms like Facebooks and Google — which harvest users’ personal information and position it for profit – and are switching to services built on technologies that emphasize user privacy and data sovereignty, Segarra said. Companies building on these zero-knowledge platforms are attracting investors looking to speculate on the next big industry winners, he said.  

Platform that protects personal data

To help facilitate this new internet model, Internxt wants to establish itself as a home to all this new protected personal data and files. This is an open-source, blockchain-based cloud storage service providing safe, secure and GDPR-compliant digital storage advocating for user privacy rights, Segarra said.

“We’ve always known what we had to bring because there are a lot of Web3 companies that nobody understands,” Segarra said. “So we’re trying to make things that people actually want to use. And we’ve actually served that with Web3 pretty well already. There’s a lot of hype around Web3 right now, everyone’s talking about it.” 

“We’re right on time because we launched our service a couple of years ago when this wasn’t a ‘thing’ yet. And now we’re very, very well positioned — you know, as a Google alternative for Web3” Segarra added.

But this is a completely unique business model. Internxt is a freemium software-as-a-service (SaaS) service with 1 million active users that positions itself as an alternative to Google Drive. Basic-level users can obtain 10GB of free storage service on Internxt’s cloud and can encrypt, store and share personal or business files in total privacy, Segarra said. Additional storage can be had for prices ranging from 80 cents to $9 per month for 20GB to terabytes, he said.

Alternative to Google Drive

During 2021 alone, Segarra said, Internxt’s revenue and user base grew by more than 1,000% and he said he’s confident that the company will produce similar growth figures this year. 

“You can use it (Internxt) on your web browser. You can use it on your phone, you can actually get it in the app store or whatever,” Segarra said. “And you can use it on Internet Explorer or any other browser; you can use it like you’d use Google Photos or Google Drive; you’ll be able to look into your pictures or whatever. Same for MacOS windows. We’re everywhere and it’s free.”

Flush with cash after landing €4M ($4,289,360 USD) in new VC funding from investors that include Spanish financier Balaji S. Srinivasan, media company Telefonica and others, Internxt currently is in an enviable financial position, Segarra said. 

“Are we very cash efficient? We’ve got a 90% gross margin; we generated 4 million euros in $4.5 million in revenue this year. We’re using all this cash directly from our revenue,” Segarra said. “We’re using all of that to grow sustainably. We’re very happy with our cash position.”

Lead investor Srinivasan, a former general partner at Andreessen Horowitz (a16z), is no stranger to tech startups. He is the cofounder of Earn.com (acquired by Coinbase), Counsyl (acquired by Myriad), Teleport (acquired by Topia) and Coin Center. He served as the CTO of Coinbase until 2019 before moving on to become one of the most prominent angel investors in tech and Web3, with early stakes in Alchemy, Chainlink, Clubhouse and others.

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