Open-Xchange, a longtime provider of white-label email that jumped into the consumer space this past year, has raised $25 million to continue expanding its services that offer a different balance between privacy and advertising.
The round was led by Iris Capital and included current investors such as eCapital. The company said the investment will be used to expand Open-Xchange’s headcount, which now stands at 250 people, as well as to continue to develop its products and services.
Founded in 2005, Open-Xchange makes technology widely used to power the email services offered by more than 100 large hosting and telecom companies. But late last year, Open-Xchange decided to start offering its services directly to consumers.
The idea was to create a European-based alternative to most email services in a way that severely limits collection of user data and the ability to sell it to advertisers.
This new service, called OX.io, allows users to get a free email account by opting into a broad advertising category or pay to get an ad-free premium version. The companies promise users that their email and search history will not be tracked. And the email comes with PGP encryption.
Last December, as the new service launched, the company also said it had raised $5.2 million. This new money gives the company a significant boost.
“Open-Xchange is a key player in the open source ecosystem and a true European business pride,” said Curt Gunsenheimer, senior partner at Iris Capital, in a statement. “In fighting for openness, they make the digital landscape secure and transparent for all.”
The company says it was profitable in 2016 for the second straight year. And it claims to have grown at least 45 percent annually for the past decade.