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Valencia-based startup Internxt has been quietly working on an ambitious plan to make decentralized cloud storage massively accessible to anyone with an internet connection.

Its just bagged $1 million in seed funding led by Angels Capital, a European VC fund owned by Juan Roig (aka Spains richest grocer and second-wealthiest billionaire), and Miami-based The Venture City. It had previously raised around half a million dollars via a token sale to help fund early development.

The seed funds will be put toward its next phase of growth its month-to-month growth rate is 30% and it tells us its confident it can at least sustain that including planning a big boost to headcount so it can accelerate product development.

The Spanish startup has spent most of its short life to date developing a decentralized infrastructure that it argues is both inherently more secure and more private than mainstream cloud-based apps (such as those offered by tech giants like Google).

This is because files are not only encrypted in a way that means it cannot access your data but information is also stored in a highly decentralized way, split into tiny shards which are then distributed across multiple storage locations, with users of the network contributing storage space (and being recompensed for providing that capacity with you guessed it crypto).

Its a distributed architecture, weve got servers all over the world, explains founder and CEO Fran Villalba Segarra. We leverage and use the space provided by professionals and individuals. So they connect to our infrastructure and start hosting data shards and we pay them for the data they host which is also more affordable because we are not going through the traditional route of just renting out a data center and paying them for a fixed amount of space.

Its like the Airbnb model or Uber model. Weve kind of democratized storage.

Internxt clocked up three years of R&D, beginning in 2017, before launching its first cloud-based apps: Drive (file storage), a year ago and now Photos (a Google Photos rival).

So far its attracting around a million active users without paying any attention to marketing, per Villalba Segarra.

Internxt Mail is the next product in its pipeline to compete with Gmail and also ProtonMail, a pro-privacy alternative to Googles freemium webmail client (and for more on why it believes it can offer an edge there read on).

Internxt Send (file transfer) is another product billed as coming soon.

Were working on a G-Suite alternative to make sure were at the level of Google when it comes to competing with them, he adds.

The issue Internxts architecture is designed to solve is that files which are stored in just one place are vulnerable to being accessed by others. Whether thats the storage provider itself (which may, like Google, have a privacy-hostile business model based on mining users data); or hackers/third parties who manage to break the providers security and can thus grab and/or otherwise interfere with your files.

Security risks when networks are compromised can include ransomeware attacks which have been on an uptick in recent years whereby attackers that have penetrated a network and gained access to stored files then hold the information to ransom by walling off the rightful owners access (typically by applying their own layer of encryption and demanding payment to unlock the data).

The core conviction driving Internxts decentralization push is that files sitting whole on a server or hard drive are sitting ducks.

Its answer to that problem is an alternative file storage infrastructure that combines zero access encryption and decentralization meaning files are sharded, distributed and mirrored across multiple storage locations, making them highly resilient against storage failures or indeed hack attacks and snooping.

The approach ameliorates cloud service provider-based privacy concerns because Internxt itself cannot access user data.

To make money its business model is simple, tiered subscriptions: With (currently) one plan covering all its existing and planned services based on how much data you need. (It is also freemium, with the first 10GB being free.)

Internxt is by no means the first to see key user value in rethinking core internet architecture.

Scotlands MaidSafe has been trying to build an alternative decentralized internet for well over a decade at this point only starting alpha testing its alt network (aka, the Safe Network) back in 2016, after 10 years of testing. Its long-term mission to reinvent the internet continues.

Another (slightly less veteran) competitor in the decentralized cloud storage space is Storj, which is targeting enterprise users. Theres also Filecoin and Sia both also part of the newer wave of blockchain startups that sprung up after Bitcoin sparked entrepreneurial interest in cryptocurrencies and blockchain/decentralization.

How, then, is what Internxts doing different to these rival decentralized storage plays all of which have been at this complex coal face for longer?

Were the only European-based startup thats doing this [except for MaidSafe, although its U.K. not EU based], says Villalba Segarra, arguing that the European Unions legal regime around data protection and privacy lends it an advantage versus U.S. competitors. All the others, Storj, plus Sia, Filecoin theyre all U.S.-based companies as far as Im aware.

The other major differentiating factor he highlights is usability arguing that the aforementioned competitors have been built by developers for developers. Whereas he says Internxts goal is be the equivalent of Coinbase for decentralized storage; aka, it wants to make a very complex technology highly accessible to nontechnical internet users.

Its a huge technology but in the blockchain space we see this all the time where theres huge potential but its very hard to use, he tells TechCrunch. Thats essentially what Coinbase is also trying to do bringing blockchain to users, making it easier to use, easier to invest in cryptocurrency etc. So thats what were trying to do at Internxt as well, bringing blockchain for cloud storage to the people. Making it easy to use with a very easy to use interface and so forth.

Its the only service in the distributed cloud space thats actually usable thats kind of our main differentiating factor from Storj and all these other companies.

In terms of infrastructure its actually pretty similar to that of Sia or Storj, he goes on further likening Internxts zero access encryption to Proton Drives architecture (aka, the file storage product from the makers of end-to-end encrypted email service ProtonMail) which also relies on client-side encryption to give users a robust technical guarantee that the service provider cant snoop on your stuff. (So you dont have to just trust the company not to violate your privacy.)

But while its also touting zero access encryption (it seems to be using off-the-shelf AES-256 encryption; it says it uses military grade, client-side, open-source encryption thats been audited by Spains S2 Grupo, a major local cybersecurity firm), Internxt takes the further step of decentralizing the encrypted bits of data too. And that means it can tout added security benefits, per Villalba Segarra.

On top of that what we do is we fragment data and then distribute it around the world. So essentially what servers host are encrypted data shards which is much more secure because if a hacker was ever to access one of these servers what they would find is encrypted data shards which are essentially useless. Not even we can access that data.

So that adds a huge layer of security against hackers or third-party [access] in terms of data. And then on top of that we build very nice interfaces with which the user is very used to using pretty much similar to those of Google and that also makes us very different from Storj and Sia.

Storage space for Internxt users files is provided by users who are incentivized to offer up their unused capacity to host data shards with micropayments of crypto for doing so. This means capacity could be coming from an individual user connecting to Internxt with just their laptop or a data center company with large amounts of unused storage capacity. (And Villalba Segarra notes that it has a number of data center companies, such as OVH, are connected to its network.)

We dont have any direct contracts [for storage provision] Anyone can connect to our network so data centers with available storage space, if they want to make some money on that they can connect to our network. We dont pay them as much as we would pay them if we went to them through the traditional route, he says, likening this portion of the approach to how Airbnb has both hosts and guests (or Uber needs drivers and riders).

We are the platform that connects both parties but we dont host any data ourselves.

Internxt uses a reputation system to manage storage providers to ensure network uptime and quality of service and also applies blockchain proof of work challenges to node operators to make sure theyre actually storing the data they claim.

Because of the decentralized nature of our architecture we really need to make sure that it hits a certain level of reliability, he says. So for that we use blockchain technology When youre storing data in your own data center its easier in terms of making sure its reliable but when youre storing it in a decentralized architecture it brings a lot of benefits such as more privacy or its also more affordable but the downside is you need to make sure that for example theyre actually storing data.

Payments to storage capacity providers are also made via blockchain tech which Villalba Segarra says is the only way to scale and automate so many micropayments to ~10,000 node operators all over the world.

Discussing the issue of energy costs given that proof of work blockchain-based technologies are facing increased scrutiny over the energy consumption involved in carrying out the calculations he suggests that Internxts decentralized architecture can be more energy efficient than traditional data centers because data shards are more likely to be located nearer to the requesting user shrinking the energy required to retrieve packets versus always having to do so from a few centralized global locations.

What weve seen in terms of energy consumption is that were actually much more energy efficient than a traditional cloud storage service. Why? Think about it, we mirror files and we store them all over the world Its actually impossible to access a file from Dropbox that is sent out from [a specific location]. Essentially when you access Dropbox or Google Drive and you download a file theyre going to be sending it out from their data center in Texas or wherever. So theres a huge data transfer energy consumption there and people dont think about it, he argues.

Data center energy consumption is already 2%* of the whole worlds energy consumption if Im not mistaken. So being able to use latency and being able to send your files from [somewhere near the user] which is also going to be faster, which is all factored into our reputation system so our algorithms are going to be sending you the files that are closer to you so that we save a lot of energy from that. So if you multiple that by millions of users and millions of terabytes that actually saves a lot of energy consumption and also costs for us.

What about latency from the users point of view? Is there a noticeable lag when they try to upload or retrieve and access files stored on Internxt versus for example Google Drive?

Villalba Segarra says being able to store file fragments closer to the user also helps compensate for any lag. But he also confirms there is a bit of a speed difference versus mainstream cloud storage services.

In terms of upload and download speed were pretty close to Google Drive and Dropbox, he suggests. Again these companies have been around for over 10 years and their services are very well optimized and theyve got a traditional cloud architecture which is also relatively simpler, easier to build and theyve got thousands of [employees] so their services are obviously much better than our service in terms of speed and all that. But were getting really close to them and were working really fast towards bringing our speed [to that level] and also as many features as possible to our architecture and to our services.

Essentially how we see it is were at the level of Proton Drive or Tresorit in terms of usability, he adds on the latency point. And were getting really close to Google Drive. But an average user shouldnt really see much of a difference and, as I said, were literally working as hard as possible to make our services as useable as those of Google. But were ages ahead of Storj, Sia, MaidSafe and so forth thats for sure.

Internxt is doing all this complex networking with a team of just 20 people currently. But with the new seed funding tucked in its back pocket the plan now is to ramp up hiring over the next few months so that it can accelerate product development, sustain its growth and keep pushing its competitive edge.

By the time we do a Series A we should be around 100 people at Internxt, says Villalba Segarra. We are already preparing our Series A. We just closed our seed round but because of how fast were growing we are already being reached out to by a few other lead VC funds from the U.S. and London.

It will be a pretty big Series A. Potentially the biggest in Spain We plan on growing until the Series A at at least a 30% month-to-month rate which is what weve been growing up until now.

He also tells TechCrunch that the intention for the Series A is to do the funding at a $50 million valuation.

We were planning on doing it a year from now because we literally just closed our [seed] round but because of how many VCs are reaching out to us we may actually do it by the end of this year, he says, adding: But time frame isnt an issue for us. What matters most is being able to reach that minimum valuation.

*Per the IEA, data centres and data transmission networks each accounted for around 1% of global electricity use in 2019

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Internxt gets $1M to be the Coinbase of decentralized storage - TechCrunch