Denmark’s RushFiles Secures $3.5M in Funding to Compete on International Cloud Storage Stage

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Denmark-based RushFiles announced that it has secured $3.5 million (19 million DKK) of funding on Wednesday, with plans to use the capital to help it compete in the international cloud storage market. Participants in the funding round include Insero, the state financing foundation Vækstfonden, and venture capital firm North-East Venture.

RushFiles provides a cloud-based file sharing service service similar to Dropbox or Google. However, what makes it different is it allows users to maintain control over where in the world the data is located and on what servers. This is especially important for countries with regulations and laws regarding data sovereignty.

When the product launched in December 2013, RushFiles was focused on gaining traction in the local Danish market after raising $1.7 million in an initial funding round. Since then, RushFiles has amassed users in nine countries, counting Danish telecom TDC as one of its major customers.

“Our mission is to onboard around a half-million users in the next 12 months. The hosting industry already has the users, we just need to provide the software,” Rushfiles CEO Morten Klank tells the WHIR in an exclusive interview.

The cloud storage market is growing quickly. According to numbers from Worldwide Forecasts & Analysis, cloud storage market development will grow by 40.2 percent from 2012 to 2018, and should continue to have double-digit growth rates each year.

“The market for cloud-based file sharing is growing strongly and RushFiles has a unique product that is very scalable and attractive in a market where insufficient data security is an increasing problem,” Insero chairman Ulrik Kragh said in a statement. “The potential is tremendous and with this agreement involving several investors, we are gearing our investment significantly–to RushFiles great advantage.”

Klank tells the WHIR how the initial concept for RushFiles changed over time. Once it had feedback from the local market, it slightly adapted it’s file-sharing software to better serve the needs of large enterprise customers.

“The idea for the product was originally as an on-prem product software for SMEs to install in their existing servers to get the Dropbox functionality from their in-house behind the firewall servers,” Klank says. “What happened was none of the SMEs wanted to have our software but all the large enterprises were calling us up and saying ‘that’s awesome we want that software’ and so did the hosting companies.”

In shifting its product to better serve enterprises, the main focus is on security. According to RushFiles, its product is as easy to use as Dropbox, but gives companies control over their own data. This allows customer to know exactly where the files are physically hosted.

Klank says the service is technically different than competitors such as open source ownCloud by solving user problems such as running out of hard drive space.

“I’ve seen use cases where CEOs run out of space on their laptops and they think, ‘OK, these four folders are in my favorites, I don’t need them.’ And what do they do they just delete them, and then suddenly they have deleted half of the company’s data,” Klank says. A solution such as Rushfiles allows companies to store and access data in the cloud so that local storage is no longer an issue.

In June, ownCloud announced version 7 with new functionality similar to Rushfiles. According to eWeek, “Among the new features in the ownCloud 7 community beta release is the ability to do server-to-server sharing. The ownCloud technology, which is deployed on an organization’s own server, previously did not easily enable server-to-server sharing.”

However, RushFiles already has this functionality in place in a well-researched application. “We are very different from all the other solutions technically because when we first did the scope for the business idea we looked at the customer’s needs,” Klank says. “We sat down and said what is it that you actually want to achieve as a hosting company if you want to engage with a customer with this kind of solution. And the first thing that came to mind, and that’s actually our mantra, is that we want to migrate the file server from on-prem to a data center.”

“One of the huge issues with all the solutions in the market is that they are centered around the documents, so it’s about my documents on my PC syncing with the cloud and sharing. So the limit is always within the boundaries of how much space you have on your laptop. So if I want to share data with you, you can’t get it unless you have the space on your laptop. When you look at the corporate world, you have companies that have tens of terabytes of data, how would you ever give them a sync and share solution that would work if they need to have all the data on their laptop?”

Klank further explains, “So we developed a technique that we can actually can give users the file structure as metadata, like everything, 10 terabytes on a 64 gig hard drive because we don’t download the files.”

“We just give you the full file structure, you can double click on any file and it will be streamed to your computer right away or you can right click the 10, 20 folders you that you actually work with and mark them for offline synchronization,” he says.

Sales of the product will be focused on partnerships with telco and hosting companies. Current partners include Danish companies such as TDC, ScanNet, Athena and Zitcom. These companies offer RushFiles in white-labeled form. RushFiles is now pursuing some of the largest international telco and hosting companies as part of its expansion plan.

RushFiles has 10 employees with offices in Copenhagen, Aarhus and Munich. By the end of the year it will move to a head office in Horsens, Denmark.


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