Element (Vector Creations)
UK maker of Element, secure team messaging built on the open Matrix protocol.
The call
Element holds a real legal and technical edge in government messaging, but with no new funding since 2021 and shrinking headcount, its finances look shakier than its position.
Element makes messaging software that European governments and militaries can run on their own servers instead of using American cloud services like Microsoft Teams or Slack. This is hard to replace because European laws require keeping sensitive data away from US servers, and Element is the main option that meets this requirement. The big question is whether Element can turn its government customers into real, growing revenue that the company can live on, because nobody knows how much money it actually makes, it has fewer employees than it did before, and it hasn't raised new funding in years.
Why
01
AI pressure: None apparent. AI chatbots don't touch Element's real fight, which is over jurisdiction and hosting control, not chat features. Could AI do the core job? Unlikely.
02
Bigger players: Microsoft Teams (bundling with Office/Azure) and EU 'sovereign cloud' offerings. Microsoft bundles Teams into Office deals and is now pitching EU sovereign cloud, aiming straight at Element's government niche. Could a giant copy it? No, they are blocked.
03
What protects it. CLOUD Act makes US-owned Teams/Slack legally unusable for some EU government and military data, and Element leads the Matrix standard those buyers require.
What would change this call
NATO NICE2/NI2CE pilot converts to signed contract or is abandoned, within 6-12 months. Shows whether Element's flagship sovereignty deal turns into durable revenue or stalls.
Element discloses a new funding round or profitability, or headcount stabilizes/grows, within 12 months. Would indicate financial stress from 2021-era funding gap is resolving.
A named government or military body switches a Matrix deployment to Rocket.Chat or Mattermost. Would show Element losing ground on its core sovereign-messaging moat.
Element discloses a new funding round or profitability, or headcount stabilizes/grows, within 12 months. Would indicate financial stress from 2021-era funding gap is resolving.
A named government or military body switches a Matrix deployment to Rocket.Chat or Mattermost. Would show Element losing ground on its core sovereign-messaging moat.
Key numbers
- No funding round disclosed since $30M Series B
- Headcount reportedly fell 126 to roughly 80
- Over $50M invested in Matrix/Element since 2017
Named risks
- No disclosed revenue or funding round since July 2021 leaves financial health unverifiable.
- Headcount appears to have fallen from 126 in 2024 to about 80 by mid 2026.
- Revenue leakage from systems integrators freeriding on open-source Matrix components.
- Binary outcome risk if NATO's NICE2 pilot fails to convert into a formal contract.
- India's 2023 ban on Element remains unresolved, limiting one national market.
Rivals, as read in July 2026
| Rival | Direction | Evidence |
|---|---|---|
| Rocket.Chat | contesting | Rocket.Chat markets itself directly against Element for European government deals, 2026-02-10 |
| Mattermost | contesting | Listed as direct peer in secure team messaging niche as of 2026 |
| Wire | contesting | Named among closest competitors in encrypted enterprise messaging, 2026 |
| Microsoft Teams | contesting | Element filed UK CMA complaint against Microsoft's business software dominance, 2026-06-03 |
| Zulip | contesting | Named as peer in sovereign/secure chat comparisons, 2026 |
| Threema | contesting | Identified as competitor in company profile data, undated |
Questions people ask
- Is Element (Vector Creations) profitable in 2026?
- Element does not publicly disclose revenue or profit figures. CEO Matthew Hodgson said in September 2024 the company was deliberately shifting from VC dependence toward self-sustaining revenue, but no profitability figures have been confirmed since, and no equity round has closed since July 2021.
- Who owns Element, the Matrix messaging company?
- Element is privately held, founded and led by Matthew Hodgson (CEO) and Amandine Le Pape (COO), who also run the nonprofit Matrix.org Foundation. Investors include Status.im, Notion Capital, Dawn Capital, firstminute Capital, Automattic, Protocol Labs and Metaplanet, with the last round in July 2021.
- Could AI replace Element's messaging product?
- Unlikely in the near term. Element's core product is encrypted team chat on the Matrix protocol, a workflow not driven by generative AI. Its moat is sovereign government procurement and protocol ownership, not AI capability, though rivals like Teams and Slack are adding AI features Element has not matched as of 2026.
- Who is Element's biggest competitor?
- In the sovereign/secure-messaging niche, Element competes with Rocket.Chat, Mattermost, Wire, Zulip and Threema, per a Rocket.Chat comparison dated 2026-02-10. Microsoft Teams and Slack are structurally barred from many sovereignty-driven government buyers over CLOUD Act jurisdiction concerns.
- Has Element raised any funding recently?
- No new equity round has been publicly reported since its $30M Series B in July 2021, led by Protocol Labs and Metaplanet, which brought cumulative funding to about $48M. In 2024 CEO Hodgson said the company was deliberately moving away from further VC raises.
- What government contracts does Element hold?
- Element powers France's Tchap (5.5 million civil servants, 300,000+ active users as of October 2025) and Germany's BwMessenger for the Bundeswehr (100,000+ active users, October 2025). NATO is also piloting a Matrix-based messenger called NICE2 as of late 2025.
Timeline
- 2026-06-03Element submits comments to UK CMA probe into Microsoft's business software dominance
- 2026-02Discord age-verification backlash drives user surge toward Matrix-based alternatives
- 2025New Vector Limited renamed Element Creations Limited; ESS Pro, Element Pro, Build license launched
- 2024-12Element launches Synapse Pro homeserver product for nation-scale deployments
- 2024-11-11Job posting lists Element headcount at 126 employees
- 2024-09-25CEO Hodgson describes deliberate pivot from VC funding to self-sustaining revenue
- 2024-09Element shifts client licensing toward AGPLv3 and obtains ISO 27001:2022 certification
- 2023India bans Element among 14 messaging apps
- 2021-07-27Element raises $30M Series B led by Protocol Labs and Metaplanet, cumulative ~$48M
- 2020-07Riot rebrands to Element
Revision history
23 July 2026
First assessed. Protection under test. The text above is fixed as of this date and is not edited afterwards.
In the same band
Sources
- Company Information
- Element (software)
- Element Creations Ltd., London, Companies House 10873661 (2026-02-22)
- The relationship between Element and Matrix
- How Much Did Element Raise? Funding & Key Investors (2026-05-25)
- Slack-rival Element wins largest ever collaborative software deal (2021-02-04)
- Element, a messaging app built on the decentralized Matrix protocol, raises $30M (2021-07-27)
- Microsoft's business software ecosystem: Element's response (2026-06-03)
- Funding open source and keeping comms private (2024-09-25)
- Safer than Telegram? Encrypted chat app protects 51m users from the elements (2022-04-06)
- European governments opt for open source alternatives to Big Tech encrypted communications (2025-10-31)
- Senior Technical Account Manager - Element (2024-11-11)