Protonthe Swiss company behind a suite of privacy-focused apps like ProtonMailis following in the footsteps of Signal and Mozilla by transitioning to a new nonprofit foundation model.
The new configuration Proton Foundation will act as the principal shareholder of the existing corporate entity that is Proton AG, which will continue as a for-profit company under the auspices of the Foundation. This, according to the general director Andy YenIt is designed to make the organization self-sustaining, without having to rely on donations, grants or business ties with corporations.
In fact, while people like Signal has relied on the support from billionaires like WhatsApp co-founder Brian Acton, and Mozilla leans in largely on Google search revenue, Yen says the Proton Foundation wants to differentiate itself by keeping a “profitable and healthy business” at its core. Basically, you want to operate as if you were a genuine for-profit company, without having to convince the world that your promise of “privacy” plays second fiddle to outside entities.
“This change in governance does not indicate a change in the way our core businesses are managed,” Yen wrote in a blog post announcing the change today. “Proton is not profit-driven, but we must still keep profitability as a core objective because a cornerstone of safeguarding Proton’s mission is independence through self-sustainability.”
Proton’s move points to the challenges inherent in building a business around privacy, particularly when external funding has been raised and investors are looking for a return. Proton, for its part, has always positioned itself as “independent,” both from an ownership perspective without venture capital investors and from a technology perspective, eschewing the usual public cloud providers to operate its own servers and equipment. network.
By shifting to a model where it operates for-profit under a nonprofit foundation, the company is trying to forge a path that maintains privacy as a core principle while retaining some of the advantages that business offers. Privately held, this includes being able to offer stock options to “attract and incentivize top tech talent,” according to Yen, who added that the setup would still allow the company to go public in the future if necessary.
“As with much of what we do, this approach is unique, but we believe this hybrid model offers the best of both worlds,” Yen said. “However, control of the foundation would always require the company to act in a way that does not jeopardize Proton’s original mission, and Proton’s financial success is directly committed to the public good. In this way, we seek to preserve not only Proton’s values, but also our culture of innovation, entrepreneurship and ambition, and our tireless competitive spirit.”
The story so far
Founded in Geneva, Switzerland, in 2014, Proton is best known for its ProtonMail encrypted email service, but the company has expanded into all kinds of privacy-focused products, including a VPN, password manager, calendar and cloud storage.
Shortly after its launch in 2014, the company setting to crowdfunding campaign which raised around $500,000, before going on to raise additional $2 million from Silicon Valley venture capital firm Charles River Ventures (CRV) and Swiss nonprofit Genevoise Foundation for Technological Innovation (FONGITO). Today, Proton says it no longer has venture capital investors as shareholders, and CRV selling his stake to FONGIT in 2021.
Yen, fellow co-founder Jason Stockmanand the company’s engineering director (and first employee) Dingchao Lu have donated some shares to the foundation, thus making it the “main” shareholder. However, it’s unclear how much stake it owns and who else retains a stake in the company – TechCrunch has reached out to Proton for clarification here.
Both Yen and Lu will serve on the Foundation’s board of directors, along with the inventor of the webSir Tim Berners-Lee; Prof. Carissa Véliz, professor of ethics at the Institute of AI Ethics at the University of Oxford; and Antonio Gambardelladirector of Fongit.