Impossible Cloud raises $7.6M to decentralize cloud services with Web3

Impossible Cloud has raised $7.6 million to provide decentralized multi-service enterprise cloud solutions for both traditional and Web3 businesses.

HV Capital and 1kx led the heavily oversubscribed round, with more investment from Protocol Labs, TS Ventures, and very early Ventures. In addition to capital contributed by the founders, the seed round brings the company’s funding to date to more than $10.9 million.

The funding for Hamburg, Germany-based Impossible Cloud will be used to accelerate the market entry of its cloud storage solution, which will bridge the gap between traditional and Web3 businesses. This is the latest idea from entrepreneurs who founded one of Germany’s most successful game companies.

Impossible Cloud’s platform supports an almost unlimited capacity of storage; it is designed for 100% durability and without any single point of failure, guaranteeing 99.95% availability above industry standard. Additionally, it can provide access to a global network of enterprise-grade storage hubs, enabling reliable performance and efficiency near the customer’s edge.

Funding for Web3 startups plummeted 74% in the fourth quarter alone, fueled by the fallout from FTX and Web3’s over-association with crypto. In fact, Impossible Cloud is taking a different approach to Web3, which doesn’t require cryptocurrencyresolving many of the fundamental concerns that have slowed business-to-business adoption. The company believes this could be an example of the future of Web3 and a model that many others will copy.

Origins

The founders started pulling together the business about a year and a half ago.

This is not the first time thatKai Wawrzinek has tried something new. He had a doctorate in law and his brother Christian Wawrzinek had a doctorate in orthodontics. But they grew weary of their professions and cofounded Goodgame Studios along with Fabian Ritter in 2010. They grew the mobile game company to more than 300 million registered users and sold it to Stillfront Group in 2018.

Kai Wawrzinek stayed another three years on the board, but he started exploring the idea of Web3 and enterprise cloud services. Impossible Cloud cofounder Christian Kaul also worked with Wawrzinek at Goodgame Studios, and they decided to work together again.

Kaul said they were scanning a lot of different opportunities for entrepreneurship. They saw the most meaningful opportunity in this enterprise Web3 space, where the traditional players were mighty but ripe for disruption.

“It’s about the inevitable wave of Web3,” Wawrzinek said. “There’s a bright future for gaming and entertainment. But I think the chance of really having a huge impact on the future is in the cloud space. It was so striking for me that I think this is even bigger, and I really wanted to do where I can really influence the future.”

To show that he was all-in on Impossible Cloud, Wawrzinek quit his other board duties and family office investment positions. That meant he cut his ties to his former career as a game developer.

“We really investigated the space, and it was tremendously interesting to see many opportunities,” said Wawrzinek. “But this opportunity was so striking because it’s a tremendous once-in-a-lifetime opportunity. I think the timing is just great.”

They saw that other companies in the hyperscaling business like Amazon were engaged in fierce competition, in a bloody red ocean. But no one seemed focused on what Impossible Cloud was doing.

“We are building an enterprise decentralized cloud as one of the first companies taking this approach,” Wawrzinek said. “The Web3 decentralized approach is really fresh. What is missing is the enterprise-grade products in the Web3 world.”

The Web3 advantage

Impossible Cloud is bring Web3 to cloud services.

The idea was to build for enterprise customers or regular mainstream Web2 businesses a holistic cloud offering, starting with object storage in the cloud. But this would use Web3 technology, or decentralized storage, but it wouldn’t involve cryptocurrency. The first product in enterprise-grade object storage will launch in a couple of weeks.

“Object storage as a foundation is super important to build a robust system,” said Wawrzinek. “One advantage of a decentralized approach for sure is that you don’t have a single point of failure. And you’re potentially better in certain security and privacy aspects. So there are many advantages that come with it. We’ll continue to build the system, build a network of nodes continuously, and so forth.”

The company can offer geofencing tech, ensuring that data for customers in the U.S. will stay in the U.S.

“It’s one of the features that is super important for enterprise customers,” Wawrzinek said. “I think it’s absurd that you have all of this data everywhere and it is all shipped to a central datacenter.”

Another advantage of Web3 is giving partial ownership to those who provide the computing power, incentivizing them to provide the computing foundation. They can also use multiple layers of encryption and spread the security task out to multiple node operators.

“You need to build trust over time,” said xxx. “It’s tremendously important if you want to build something in the enterprise world.”

Over time, they want to expand the enterprise services and compete with a more efficient infrastructure.

“If you compete with central Web2 organizations, you will always have more people. Like no matter how many smart people are working inside one company, you will always have more smart people outside of this company,” Wawrzinek said. “And if you can tap into this potential with Web3 incentivization, you can really build a massive amount of infrastructure, or a massive amount of software.”

How it works

Impossible Cloud founders Kai Wawrzinek (left), Christian Kaul (center) and Daniel Baker.

Impossible Cloud will be the first decentralized, enterprise-grade cloud platform offering a comprehensive suite of services backed by a fiat-based payment system and business model catering to B2B customers. This approach delivers the key benefits of Web3 technology, including increased speed, affordability and security, without the need to transact with tokens or cryptocurrency.

With just a single line of code, customers can access Impossible Cloud’s cloud storage service.

“Our ultimate goal is to create a decentralized, cost-effective, enterprise-grade cloud platform that will revolutionize the way businesses utilize cloud services, providing enhanced efficiency, elasticity, and security,” said Wawrzinek.

The company ensures the highest level of security and compliance by combining the intrinsic benefits of web3 security with industry-leading security protocols, and by operating out of enterprise-grade data centers that are fully compliant with standards such as ISO27000, SOC 2 Type II, and many more.

“Cloud services have quickly disrupted countless industries, but today’s systems have already become ‘legacy’ and are riddled with limitations. We’ve reimagined what cloud storage can do and the value it delivers, accomplishing what many considered impossible,” added Wawrzinek. “Our partners at HV Capital, 1kx and TS Ventures are successful visionaries who understand the possibilities of Web3, and we look forward to collaborating with them.”

“Impossible Cloud is disrupting cloud computing,” said Jan Miczaika, a partner at HV Capital, in a statement. “By entering the market with an enterprise-grade cloud storage ecosystem leveraging Web3 technology, the company’s business model delivers the critical benefits of web3 for the enterprise cloud market. In addition to this revolutionary approach, the founding team has a strong track record of founding and scaling successful businesses.”

“Decentralization can breed resilience and antifragility in large-scale software networks,” said Lasse Clausen, Founding Partner at 1kx, in a statement. “We’re excited to back this great team to bring decentralization and its benefits to global cloud computing.”

Impossible Cloud is led by a team of experienced technology-company founders, including Kai Wawrzinek, Christian Kaul and Daniel Baker. The team has a proven track record in helping to build publicly traded unicorn companies, including Goodgame Studios, Stillfront, Airbnb, and Iron Mountain. Impossible Cloud has already garnered significant interest from potential customers and is working closely with leading SaaS providers to integrate their services into the platform.

“We are excited to be at the forefront of commoditizing web3 technology for mainstream business adoption, and confident that our decentralized, enterprise-grade cloud platform will be a game-changer in the cloud industry,” said Kaul. “We believe Impossible Cloud will play a major role in the way the internet will look in 5 to 10 years and be a major force in the cloud services market.”

With its growing employee team, Impossible Cloud intends to incorporate in the United States, build an elastic network of enterprise-grade storage hubs, and expand the capabilities of its platform. Impossible Cloud has about 20 people and it is hiring.

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