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A place to share alternatives to popular online services that can be self-hosted without giving up privacy or locking you into a service you don't control.
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You're right that XMPP is federated as well and Matrix can be non-federated but I've heard some people had trouble with the Synapse server chugging resources despite not using federation.
I've been self-hosting Matrix Synapse for more than two years to chat friends and family and it has been rock-solid and it's on a VPS that os hosting a Nextcloud and Lemmy instance as well. It is definitely not really resource hungry for small groups of people.
If you want to try again this route, just make sure that everybody saves a backup of their keys as the messages are all encrypted and while you can authenticate a new client installation from another client that the same user is logged in, some people - like my mother - only use one, on her phone, which is understandable.
So in summary, I'm very happy with it! :)