Berlin Web Host Raises $2M for Germany-based Cloud Services

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Berlin-based web hosting startup has received about $2 million (€1.5 million) from Russian venture capital firm Runa Capital in Series A funding which will help the company provide managed services from infrastructure based entirely in Germany.

With the many privacy concerns raised after the extent of the US government’s international espionage operations became known, hopes to provide an alternative to large US cloud providers such as Microsoft, Google and Amazon that will abide by Germany’s strict privacy laws. All customer data will be stored locally and be administered under explicit information security management controls (ISO 27001).

The company isn’t starting from scratch with its services, however, it will be taking Microsoft products and “tailoring them specifically to the needs of German SMBs”.

“With Microsoft we also use a technology from the USA, but we entrust this to the German IT companies to break the dominance and the sale toward the American cloud companies,” Markus Kempkes, CEO said in a statement.

Investor Runa Capital has also helped fund Nginx, Jelastic,Acumatica, and BackupAgent, and is co-owned by Parallels and Acumatica founder Serguei Beloussov.

Beloussov stated that German companies are beginning to realize the value of hosting locally. “The cloud is a tectonic shift toward the way IT is delivered and consumed, and to date in Germany it has been leaving traditional IT channels – distributor, reseller, var, system integrator – behind,” he said. “ managed services are delivered securely from a German-based cloud, enabling these traditional channels to survive and thrive in the new cloud world.”, however, isn’t nearly the first company to attempt to build its service around the apparent distrust of US-based cloud services. In 2013, German IT services providers participated in a marketing campaign called “Email Made in Germany”, reminding users that their email might be physically located somewhere unsafe.

Germany is among many countries with strong privacy laws that have been pursuing more locally-oriented services on the broader Internet. Swiss telecom Swisscom has revealed plans to create a cloud service that would store data within Switzerland where privacy regulations are very strict.

The US hosting industry has been appealing to the government to provide more assurances that their customer data is reasonably safe from spying, and the Presidential Policy Directive issued by President Barack Obama earlier this month has helped resolve some tensions. Still, many say it doesn’t go far enough. One thing is for sure: until confidence is restored in US services, companies like will be able to use their location and security controls as a market advantage

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