Signal expands into the Signal Foundation with $50M from WhatsApp co-founder Brian Acton

Fundings and Exits

Perhaps the most surprising thing I learned about Signal when I spoke with Moxie Marlinspike, the encrypted chat service’s creator, last year at Disrupt, was that it was essentially running on a shoestring budget. An indispensable tool used by millions and feared by governments worldwide, barely getting by! But $50 million from WhatsApp co-founder Brian Acton should help secure the app’s future, through the newly founded Signal Foundation nonprofit.

The arrangement was announced in a dual blog post by Marlinspike and Acton on the Signal blog. As the former writes:

Signal has never taken VC funding or sought investment, because we felt that putting profit first would be incompatible with building a sustainable project that put users first. As a consequence, Signal has sometimes suffered from our lack of resources or capacity in the short term, but we’ve always felt those values would lead to the best possible experience in the long term.

This enforced austerity of having few developers (count them on one hand) and no real office (they work in a shared space) has finally resulted in substantial dividends — well, not dividends technically, but certainly just rewards.

Operating as a nonprofit keeps things simple for Signal, much as they have been for years: offer this service as a public good, cover the cost with donations and grants and never feel any pressure to make any money or pay off investors. The $50 million comes directly from Acton’s own funds.

Well, almost no pressure. In Acton’s part of the post, he explains that although the goal is “to pioneer a new model of technology nonprofit focused on privacy and data protection for everyone, everywhere,” they also want to make the Signal Foundation “financially self-sustaining.” Later, he suggests “multiple offerings that align with our core mission” are in the future.

There are more and less charitable ways to take these statements. The cynical reporter in me sees these as foreshadowing of some kind of monetization plan: turn Signal into a freemium offering, set up Signal Pro or the like. Acton did just recently come from the WhatsApp-Facebook colossus, after all.

But having met Marlinspike and seen what the team has done over the last few years (not to mention the good work that originally established WhatsApp), I’m far more inclined toward the more charitable interpretation, which is simply that that there’s a way to make Signal pay for itself without compromising the principles that led to its creation in the first place.

In terms of official roles, Acton will be executive chairman of the Signal Foundation, while Marlinspike will remain CEO (and chief developer presumably) of Signal Messenger, its own nonprofit under the Foundation umbrella.

Users likely won’t see any changes, except perhaps for features on the roadmap arriving a little sooner than expected.

I’ve asked Marlinspike for a few more specifics and will update if I hear back.

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